5 Ways to Save Money and Drive Efficiencies in the Hospitality Industry
Eliminate Inefficiencies That Could Be Costing You Money
Operating a hospitality business means finding a balance between expenses and profits – no matter what the surrounding economy is doing. Like they say each dollar saved goes right to the bottom line. If you’re looking to save money in the hospitality industry, there are several approaches you can exercise:
- Leverage New Technology
- Stay on Top of Facility Maintenance
- Know When to Raise Prices
- Streamline Supply Orders
- Source Supplies Through a Group Purchasing Organization
Read on to learn how you can increase profits at your operation.
Leverage New Technology
If time is money, increasing efficiency can save money. In the hospitality industry, efficient processes can cut out wasted time and wasted resources. This leads to greater profitability across the board.
Several technologies are now becoming the norm for hospitality operators:
Virtual check-in and check-out systems
Chatbots to answer guest concerns
Smart technology in rooms
More efficient HVAC systems
These advancements and others can save your staff time, allowing them to serve guests and secure bookings more efficiently.
Stay on Top of Facility Maintenance
Sometimes, you have to spend money to save money in the hospitality industry. When it comes to taking care of your physical locations, this should be your motto. While you may resist spending money on frequent facility care, it will save you from bigger expenses in the long run. Also, determining which assets should be under a preventative maintenance service program will extend the life of key assets and reduce high reactive maintenance costs and equipment downtime.
For example, taking care of roof repairs as they arise is going to cost less than fully replacing your roof before its time. Plus, a full replacement will mean shutting down or restricting bookings which will cost you in profits.
Finally, a well-kept facility is more likely to impress guests, meaning they finish their stays satisfied. You won’t have to worry about gaining a reputation for a rundown property when you schedule consistent facility repairs.
Know When to Raise Prices
Raising your rights can be intimidating. You might worry that guests will pass you over for the cheaper option in town. However, sticking with the same prices, even when your expenses rise, will only lead you towards life in the negative.
What are some signs that it’s time to up your prices? The first is your direct competition raising their prices. You can’t undercut them forever, especially if your price differences are now extreme. The second sign is when essential products start going over budget. While you can try to cut nonessential menu items or swap out cleaning products, there are some things your business needs to stick with to operate. If they start costing more, you may need to compensate with a price increase.
When the time comes to charge guests more, make sure to change the price all at once, rather than incrementally. Studies show that customers perceive multiple price changes more negatively than single price changes of the same value.
Streamline Supply Orders
Are you ordering the right products and consolidating orders to keep your operation running? Taking a hard look at your current purchasing plan is a sure way to save time and money in the hospitality industry.
You can start by taking note of everything you buy for each location each month. Then, take note of which items don’t get used by the end of the month. You may be repeatedly purchasing more than you need. When it comes to food purchasing, there may also be a way to cross-utilize ingredients. Why buy two types of chicken when you can use the SKU for two purposes?
Source Supplies Through a Group Purchasing Organization
One of the lowest-effort ways to save money in the hospitality industry is to begin working with a group purchasing organization (GPO) like Foodbuy Hospitality. GPOs leverage greater buying power to secure competitive prices on products and services.
These partnerships are ideal for both smaller and larger hospitality operators, providing greater savings on everything from menu ingredients to lawn care services. Plus, operators who work with Foodbuy Hospitality can take advantage of comprehensive consultation services. This includes culinary support, distribution expertise, and custom contracting advisement. Become a Member of Foodbuy Hospitality now.