or shuttle services . Some properties even cut F & B outlet operations and front desk services . Not surprisingly , service and performance suffered .
As demand returned , focus on the middle of the P & L slipped , as costs went up , properties needed multiple vendors to meet their needs and pricing increased ( as there simply was not enough product available to meet needs ).
Fast forward to 2024 , and though supplychain issues have diminished , prices are still exceedingly high . Competition is returning but there are several areas that need to be evaluated if hotels and resorts want to improve profitability .
TIPS TO DRIVE PROFITABILITY There is a maxim in hospitality that goes : “ A healthy top line will drive a healthy bottom line .” That was true ; it ’ s now morphed into : “ A healthy top line is a part of a healthy bottom line .” Best practices need to come back to hospitality including , and specifically , competitive bidding and shopping for vendors , use of purchasing groups and a serious focus on energy use needs to be top of the list .
For years , hotels and resorts were following “ green ” programs for recycling , energy savings , etc . There are multiple reasons why this should take a renewed focus , besides being the right thing to do for the environment and your community . The cost of energy has skyrocketed in the past 36 months , and utility costs are typically one of the largest undistributed expenses in hospitality . Reducing those costs can have a substantial and immediate impact on profitability .
Several key items include :
• Active preventative maintenance on all main and in-rooms HVAC systems for optimal efficiency .
• Programming and upgrading building and energy management systems ( BMS and EMS ) to reduce heating and cooling during unoccupied or lower demand periods .
• Competitively reviewing energy providers and contracting energy vs . utilizing “ retail ” energy pricing .
• Operations shifts including “ dark room ” processes and setting the “ temp of the day ” for vacant rooms where no BMS exists .
In addition to energy conservation , looking at the revision in operating standards that arose following the return of demand in 2021 is imperative . Many properties restored services based on staffing levels , but limited the previously utilized standards and checks and balances for performance . As preventative maintenance took a back seat to simple break-fix work , many workarounds were needed in housekeeping , F & B , engineering and others to compensate . A return to previous standards is not only required to maintain guest service standards , but also to improve operating efficiency . Key processes include :
• Returning to full preventative maintenance programs and capital investments in infrastructure .
• Implementing programs to incentivize team members to report and correct leaks and other mechanical issues .
• Setting energy standards in rooms and public areas e . g ., “ temp of the day .”
• Utilizing competitive bidding for housekeeping , engineering , and F & B supplies .
• Reviewing overtime needs / use with leadership teams .
• Investing in training and team building programs to improve the culture and reduce turnover .
The old adage “ There is never enough time to do it right the first time but always enough time to do it over ” is a cost killer . Investing in training to reduce turnover ; holding team members accountable for performance and limiting “ go back ” time in housekeeping , engineering , etc ., along with enhanced desk training to control adjustments and offer alternatives , is essential . It is also critical to ensure teams have the tools to be successful . This helps drive team member engagement at a foundational level . Investment and dedication to culture have driven performance and carried us through the darkest days in hospitality and are an essential element to on-going success .
In hospitality there are investments and expenses . Investments in process , training and accountability will result in significantly improved performance and margins . Best practices are best practices for a reason . As we return to focusing on the little things in our business — labor hours , scheduling , linen costs , energy costs , etc .— we will find that the big things stabilize and profitability levels out . This will also help properties survive , even thrive , in an era of shifting demand and seasonality . Investments in service , training , and culture growth at properties will undoubtedly provide the greatest returns long-term . Overall , cost containment does not mean properties must curtail services , it is margin control through efficiency that builds stability and the long-term viability of the property . As properties focus on being the best employer in the market through stability and investment in the workforce and consistently apply best practices , efficiency will drive market-leading financial and service results .
Jan / Feb 2025 hotelsmag . com 41