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A 5-Week Plan for Improving Hotel Costs and Revenue [FREE WORKSHEET]

Hoteliers today are uniquely challenged to minimize costs while maximizing value. They must keep up with today’s rapid pace of innovation without increasing certain expenses. They’re expected to digitally transform while closely monitoring operating costs. They need to deliver extraordinary guest experiences while protecting the bottom line.

Striking this balance is critical: a 2017 “Trends in the Hotel Industry” report found that cost controls preserved and even increased profits for U.S. hoteliers in 2016. So, how can hospitality leaders strike this balance to improve costs and revenue? Use this five-week, step-by-step plan to brainstorm ideas and document progress…



Clear your mind and consider the current state of your organization: how do teams collaborate? How is staff managed? How do guests expect to be serviced and engaged with? Spend an entire week reflecting on different lines of business (LOB) and the processes and workflows that support them: front office, back office, property management, catering and events, accounting, HR, housekeeping. Allow yourself to slow down and thoroughly self-assess. Don’t worry about what you might miss and be sure to document your findings.



A clear understanding of your organization makes it that much easier to measure current efforts against those of top, average and low performers. The goal here is to gain an unbiased, data-driven view of successful efforts and key industry benchmarks (it’s hard to manage progress without knowing what it should look like). It’s important that you don’t limit your research during this critical developmental phase. Some good places to start:

An Examination of Hotel Labor Costs

2018 Travel and Hospitality Industry Outlook

2018 Best Hotel Rankings



At this point, you should have enough insight to begin identifying areas of improvement and even investment for your hotel. Consider short-term improvements with realistic investments, as well as long-term improvements where spending might be a reach. A short-term improvement, for example, could be bettering your minutes per room (MPR) rate with an inexpensive housekeeping training seminar. A long-term improvement could be optimizing workforce efficiency with the implementation of a labor management system (research suggests small hotels can save more than $20,000 per year with such a system, while larger hotels can clear over $80,000).

Half the battle here is attitude. Remember that anything is possible, regardless of how much red tape you must get through.



Use all this information—your insights, research and long- and short-term goals—to create an actionable timeline. This should provide a solid understanding of your hotel’s current numbers and what you’d like them to be by certain periods of time. For example:

-“By Q2 2019, we will cut food and beverage (F&B) costs by XX% while increasing consumer spending by XX%”

-“By end of year, we will embed real-time communications into apps and workflows to improve staff efficiency by XX%” (falling worker productivity has been shown to directly affect hotel revenue)

Most important is outlining steps for reaching these milestones. For example, by October 1 you will identify three new F&B vendors, with preliminary meetings to be scheduled by the start of the new year. Doing so puts you on the right path towards actually realizing each outcome, making your strategy more achievable and less stressful (on a related note, if you’re looking for helpful research on the state of hotel F&B click here or here).



Completing steps 1-4 should help prove the achievability of your plans, but don’t be discouraged if you’re still met with resistance. The best thing you can do is continually communicate with higher-ups and fellow colleagues. Any good leader will embrace your enthusiasm (especially when it comes to improving costs) and be open to supporting your vision. Remember: it doesn’t matter how fast or slow you go, just that you move.


Now get to work! Fill out this form for my free 5-week Hotel Cost & Revenue Worksheet.



Posted on June 19, 2018 in Optimizing Operations

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