Capterra Hotel Management Blog

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7 Straightforward Ways to Cut Back on Hotel Costs

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You want an easy way to save money running a hotel? Nothing in life is easy, my friend. Especially not cutting back on expenses.

Take the average consumer—which includes you, incidentally. A recent study found that nearly half of all Americans say their expenses are equal to or greater than their income. That’s… not great.

Look, it’s hard not to spend. And while many might think spending as a business is different from spending as a consumer, it’s really not. There are still the same money wasters out there, from supplies we don’t need to services that make us feel good about our business but we could probably do without.

But while there are no easy ways to cut back, there are certainly some methods you haven’t thought of to save on hotel costs. So get ready to tighten your belt, and let’s dive in to some a few tricks you can use to cut back on hotel costs.

1. Cross-train your staff

Labor makes up nearly half of hotel expenses, so if you’re tight on cash, you may want to find ways to use your staff more efficiently rather than hire more people.

One way to do this is to cross-train your staff, which is an especially good option for independent and boutique hotels.

You’re also providing a benefit to your staff by giving them more skills they can use in the hospitality industry. However, be mindful about overburdening them—that will just result in demoralized and ineffective employees.

Train your staff to help out at the front desk during peak times. Front desk staff can double as social media marketers during downtime.

2. Hire inexperienced people

If you’re willing to train people, hire inexperienced but ambitious people when you have an opening to fill.

As long as people have the right attitude and good training, they could save you a lot of money over someone with more than a decade of experience in the business.

Welcome recent graduates and ask for people with a desire to learn and grow in the hospitality industry. You’ll be doing them a big favor as well by helping them get a foot in the door.

In addition, you benefit from having people who can provide a fresh new perspective on the business, and perhaps find new and better ways of doing things at your hotel.

You will need to devote time to training them. Be patient with them and take time out of your schedule to walk them through their responsibilities together.

 Put this into action: 

The next time you have an opening, post an ad that doesn’t mention experience and instead states that you are, “seeking highly-motivated people looking to get their foot in the door of the hospitality industry.” Add a note that says recent college grads are welcome.

3. Tweak how you advertise and market

One place you can often cut the fat is marketing. Marketing is not well understood by even the best of us, and sometimes people just throw money at it without knowing if they’re getting a good return on investment.

Instead, turn to lower-cost methods of making your customers aware that you exist. Start producing great content. Get active on Facebook and Instagram to show off your hotel to your target market. Start conversations with people on social media. It’s effective, and it’s free (other than the time investment by you and your employees, of course).

Hotels that make the effort to engage with customers have a leg up on their competitors. When you’re an independent or boutique hotel, word of mouth is gold.

 Put this into action: 

If you don’t have a social media account, create one for Facebook and Instagram, or launch a blog. Come up with a strategy for how you’ll use those accounts to market to your customers, and take some inspiration from our article on successful hotel content marketing campaigns.

4. Conduct a thorough expense analysis

Do you really know where your money is going?

You may think you do, but if you sit down and crunch the numbers, you may find a few surprises—such as, say, a huge spike in IT expenses because your employees’ bandwidth usage had triggered a clause in your contract for a higher tier of service you weren’t even aware of. Or maybe you’re spending five times more on those tiny bottles of shampoo than you thought you were.

 Put this into action: 

Take a day to sit down and run some reports on expenses, and try to spot some trends. If you see in black and white where your money is going, it will immediately give you some ideas on areas where you can cut back on costs.

5. Negotiate with vendors

Perhaps you accepted the first offer from a vendor, and now that contract is coming up for renewal. If you’re tightening your belt, it’s not unreasonable to ask your vendor to do the same—or at least shop around for someone who might give you a better deal to give you some leverage.

It is much easier for a vendor to negotiate a lower price with you than to find another regular customer. Use that leverage wisely and it could save you hundreds of dollars per month.

 Put this into action: 

Come up with a list of vendors you believe you should be paying less for, and prepare a plan that will be good for the both of you going forward. Schedule a face-to-face to talk about the plan with your vendor.

6. Go green

Going green is more than saving the environment, it’s also about saving some green.

Read up on affordable ways to go green with your hotel, and come up with a plan to make it happen.

 Put this into action: 

For a minimal investment, you can buy programmable thermostats so that you aren’t spending money heating or cooling hotel rooms when no one is in them.

Another option, which costs absolutely nothing at all, is to place a note in the bathroom that requests that guests reuse towels and states that housekeeping will only replace towels and clean up the room on request. The reality is that many guests probably don’t need or want their room cleaned every day, and don’t mind reusing towels. Take advantage of that to save some cash.

7. Downsize to free software

Do you really need to pay a lot of money for hotel management software? If you run an independent or boutique hotel with just a few other employees, maybe it doesn’t make sense to pay for a bunch of features that you will never use.

 Put this into action: 

Take a good, hard look at the software you use and ask how often you use all of its features. Then take a look at our list of free and open source hotel management software, and see if you can make one of the free options work for your hotel.

Want more tips on running your hotel more effectively?

We’ve got a lot more great advice on how to manage a hotel and maximize profits.

Here are a few other pieces to help you learn more about the hospitality industry:

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About the Author

Dan Taylor

Dan is a content writer at Capterra, specializing in hotel management, construction and real estate. Outside the office, he enjoys spending time with his family and friends, catching up with the latest offering from HBO or paying a visit to a new place.

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