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Your hotel and costs

Τhe most important thing of all is to have a close working relationship with the heads of the various departments. This is where you need to have trust in their ability to do their job since it is those figures that you will then use to base your own conclusions on and to determine where more money should be spent or where too much is being spent that is causing an issue for the hotel in general.
The problem with costs is that it is very easy for them to spiral out of control and that is where we have a problem. If you fail to keep a grip on them on a regular basis, then it is very easy for a hotel to begin to spend too much money in areas that are not worthy of the expense. As a result, you try to balance the books by looking in the wrong areas to make cuts, or to increase guest numbers, when there can be important areas that are just being overlooked when this should not be the case.
Looking at where money is being spent is an important part of being the hotel manager since the overall budget for various departments falls under your jurisdiction. However, it can often be impossible for you to understand every single penny that is being spent in every single area and that is why the relationship with the individual departments really is so important. After all, it is easier to look at individual figures after they have been compiled rather than you being given the task of identifying every single invoice and cost and then coming to a conclusion on a constant basis.

Studying costs is something that you need to do on a regular basis since costs to you do change from time to time. It is important that you are aware of this so that you can look at how it has an impact on your entire budget and even impact on the way that the hotel is being run.
In the simplest of hotels, with no additional amenities like restaurant, pools, etc... staff is still the largest expense because of housekeeping

Upselling is a practice in which you try to sell additional services or items to the guests that will enhance their stay, but also enhance the turnover and profit margin of the hotel. There are various ways in which this can be done, although it does depend on the services that you have at the hotel. You can offer laundry services, promote room service, if there is a spa in the hotel then make sure that you try to sell it to them. Basically, you need to look at the services that you have to offer and try to get as many guests as possible to take advantage of them. These services already exist, so it is a shame to get to a point where they are not being used and you are potentially losing money.

Reducing costs… an example.
Wastage is a major problem in any business, and this includes the hotel industry.

You need to spend time with the head of the bar and restaurant to determine how much is being wasted on a weekly basis through ordering too much stock. Is there a way that the process can be streamlined to make it more accurate without it impacting on what is available for the guest? Careful management of stock levels in this area can reduce the costs considerably, although it does take an experienced hand to do it effectively and without it harming the level of service that is offered to the guests.

It is also important to look at your suppliers as this is another area where you could be incurring additional costs and yet there is no reason for this to be the case. People often think that shopping around and getting various things from different suppliers is the way to go, but the truth of the matter is that the opposite is true.

Security and costs
Security refers to not only overall hotel security, but also theft prevention. In a hotel, it is all too easy for guests, staff members, or even delivery workers to be able to steal various things from the hotel and this can add up to a substantial sum of money over the course of a year. Make it impossible for there to be undisclosed sales by doing an audit every single day to check both stock levels and the income for that part of the business. Theft not only costs the hotel money, but it then often leads to there being a need for the hotel to then increase prices to make up for the money that is lost, so the guests will suffer too. However, we should also stress that there are guests that will always try to steal things even from their room, so that should be factored into the price to lessen the blow somewhat.
So, with the costs you need to consider the following:

  • Keep an eye on your inventory.
  • Get the maximum life out of things.
  • Keep an eye on staff numbers.
  • Talk with head of departments and discuss their individual costs.
  • Consider retraining staff.
  • Reduce wastage.
  • Never do anything that infringes on the guests.

Christos Pashiardis – Managing Partner – Consultant
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