Revenue – costs = profitability.
At a time when increases in occupancy and RevPAR are becoming restrained, focus will understandably turn to controlling or reducing costs in operations. A key metric in this regard is costs per room.
An excellent article in Hotel News Now took a deep dive into this aspect of hotel operations, emphasizing that “the cost per room, from labor to supplies, must be factored into any hotel profitability study.”
Hotel managers can certainly negotiate better prices on linen or laundry services and cut back on free amenities in rooms but labor is the elephant in the room; by far the largest component of the room costs analyzed. In fact, salaries, wages and other payroll related expenses make up more than 60% of rooms department expenses.
As operators focus on reducing room costs, and inevitably labor costs, it is important to note that a “less expensive” employee isn’t necessarily the solution. Rather than reduce staff or wages and benefits, the challenge is to increase the productivity of each individual worker.
Here, technology in the form of hotel task optimization software platforms can increase productivity through better coordination of training programs; more efficient scheduling of assignments for housekeepers, maintenance staff or front desk personnel; and precise tracking of completion of assignments, mandated inspections and room availability.
At the same time, hospitality service software can promote a safer work environment by tracking where members of staff are at all times and integrating with personal safety devices, foster better staff communication and improve overall management of people. These systems can also analyze data collected and identify where improvements need to be made. Examples include identifying housekeepers that need extra support in completion of assigned tasks or plant areas (room faucets or toilets, lights, HVAC, etc.) that are coming up for repair or replacement too frequently.
The performance of labor is a huge factor in total room costs and profitability for hotel operations; not to mention guest satisfaction and overall reputation with brand partners, vendors and communities. If we dig a little deeper, technology can help hotel staff work faster, smart and more efficiently.