labor cost management

Smart labor cost management for independent hotels

As you likely know from first-hand experience, lots of independent hotels operate on narrow financial margins, so keeping expenses low is always a priority.  For independent hoteliers looking to better control their spending, here’s 2 smart ways to manage labor costs.

Scrutinize labor costs

Summer can be a hectic, yet lucrative, season for independent hotels.  Increased bookings can generate solid profits, but to keep this cash on-hand, hoteliers must tightly control their spending.  Labor costs can quickly make or break hotel profits, so hoteliers should analyze their labor daily to ensure they’re maximizing profits and team member productivity.

Analyzing labor is much more than crunching numbers – team member capabilities and functional area needs are also determining factors.  Scheduling according to booking forecasts versus guessing labor needs is a great step toward better controlling labor costs.  Hotel software reports can provide the data needed to better determine when you need to be fully staffed and when you can reduce labor hours.  Initially, managing labor hours may take some trial and error, as well as conversations with team members, but it will help you keep the profits needed for long-term success.

Cross-train your team members

Training team members across multiple disciplines can greatly benefit their professional development and your bottom line.  Team members who aspire to operate/own their own independent hotel, or simply advance their career, will love the opportunity to cross-train and develop new management skills.  By cross-training team members and then promoting from within, hoteliers can create opportunities to consolidate job responsibilities and eliminate the cost of hiring from outside the hotel.  Training current team members requires an upfront investment of time and money, but the long-term payback value created is almost priceless.






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