Hotels, like any other business, have several reasons as to why it is important to save money and reduce overheads and outgoings.
Inflation, labour issues, and the rising cost of meeting the needs of modern, tech-savvy consumers are just some of the challenges hoteliers are facing. Saving money and cutting costs while maintaining an excellent customer experience is not easy and is one of the key issues in the hotel world.
If you own a hotel, bed and breakfast, or holiday rental, you may be searching for ways to reduce costs. This guide will mention eight cost-saving ideas that you need to consider to save money in your hotel business.
Why is it important to cut costs?
For hotels, it is important to cut costs to improve profitability, stability, and growth. By saving money, hotels can increase their profits and reinvest those funds elsewhere in the business. This allows hoteliers to improve their cash flow management and create accurate cash flow forecasts for the future.
Cutting costs is often faster and easier than growing revenue and can provide hotels with quicker results.
How can your hotel save costs?
There are a number of different ways hotels can save money and cut costs. Here are some ways your hotel can reduce expenses:
1. Build customer loyalty
Customer loyalty can save hotels money in many different ways. For example, loyal customers are likely to return and repeat business providing you with continual income streams. Additionally, loyal customers are likely to return to your hotel without the need for targeted marketing campaigns.
In this instance, it pays to provide customers with an excellent stay and experience to benefit from future customer acquisition costs, maintain steady occupancy rates, and of course, improve your competitive advantage.
2. Encourage word-of-mouth
Furthermore, loyal and satisfied customers are likely to recommend your hotel and services through positive word-of-mouth reviews. This means your hotel can attract new customers at no additional cost.
3. Optimise working rotas
Optimising working rotas and employee schedules can cut costs by avoiding overstaffing, minimising overtime pay, and ensuring compliance with employment laws. By accurately forecasting seasonal demand, hotels can make informed staffing decisions and save money by avoiding underestimated and overestimating staffing needs.
Additionally, consistent and fair work rotas have the power to engage and motivate employees and reduce employee burnout. Happy employees are much more likely to provide a great service to guests reducing the risk of complaints and negative reviews.
4. Staff retention
Ensuring that staff are not overworked and avoid excessive working hours can help to prevent burnout and reduce employee turnover. In turn, this reduces costs by saving on recruitment, hiring, and training. Onboarding new employees is a costly process. Making sure your current workforce is happy and satisfied helps to retain your team and cut costs.
5. Adopt a good marketing strategy
A good marketing strategy will focus on targeting your target audience. Marketing efficiency avoids overspending on marketing campaigns that are not aimed toward your audience. Using an efficient marketing strategy, your hotel can produce maximum return for minimal cost. This allows you to reduce costs while maintaining optimum results.
6. Limit marketing costs
While marketing is important to attract new customers and improve brand awareness, limiting your marketing costs can save you money. However, reducing your marketing costs does not mean that you stop creating engaging content that resonates with the audience.
In fact, organic and authentic content that you or your employees can produce using a mobile phone and free editing software is proving immensely popular on social media platforms such as TikTok. Thanks to the advancement of social media, marketing no longer requires high costs to get a great return.
7. Utilise your hotel floor space
By utilising your hotel floor space, you can maximise revenue, lower operational costs, and improve the overall guest experience. Efficiently using your floor space allows your hotel to accommodate more guests improving your revenue potential. Similarly, efficient floor space reduces energy, lighting, and electricity consumption further cutting costs to save money.
8. Adopt green practices
Green and eco-friendly practices, such as reducing energy and water consumption, using renewable energy, recycling waste, and sourcing locally, not only help to cut costs but also appeal to environmentally conscious guests.
Sustainable practices are becoming a top priority for hotels as they help to reduce environmental impact while maintaining a comfortable experience for guests.
Frequently asked questions
How can hotels reduce expenses?
Hotels can reduce expenses by building customer loyalty, optimising employee schedules, implementing staff retention schemes, adopting a good marketing strategy, utilising the hotel floor plan, and adopting green practices.
How can I make my hotel more profitable?
You can make your hotel more profitable by analysing and reducing operational costs. This can be achieved by implementing energy-saving appliances to reduce utility bills, negotiating better pricing with suppliers, optimising staff rotas to avoid overstaffing, and delivering great customer experiences to build customer loyalty to secure repeat business.
How do you cut costs in housekeeping?
You can cut costs in housekeeping by encouraging guests to reuse towels to save on water consumption and labour. Additional ways you can cut costs in housekeeping include purchasing cleaning supplies in bulk, effectively scheduling room cleaning, and offering a minimum night stay to reduce cleaning between guests.
What is cost control in hospitality?
Cost control in hospitality is defined as the method of reducing business expenses by managing and analysing financial data. This is the process of reducing business expenses to increase profits and revenue and improve the profitability of a hotel business.
Stewart Hindley UK Hotel Finance and Hospitality Finance Specialists
At Stewart Hindley, we specialise in hotel finance to accelerate the success of your hospitality business. Financing a hotel is often a challenge but the good news is that we can help.
Whether you are new to trade or a first-time buyer with no track record, our specialists with over 20 years of industry experience have established relationships with lenders who will consider new-to-trade hotel operators.
With a proven track record in securing hotel finance for businesses in England, Scotland, Wales and Northern Ireland, we will find the right mortgage for you.
Our processes are clear, and we will help you every step of the way from advising what information you need to provide to liaising with lenders on your behalf.
For more information, get in touch with a member of the friendly team today.
