Overhauling a Hotel’s Operations Can Boost ROI

By Tom Baker, Managing Principal

The area of hotel operations may not spring to mind first when brainstorming ways to rev up your ROI, but it should. The complex web of daily tasks that make up the nights and days running hotel can easily become a tangle, impacting guests’ stays. It can also be the driving force behind exceeding guests’ expectations, prompting good reviews and media coverage, two factors that have been proven to increase ADR. Not to mention when a hotel operates smoothly, there is less time spent per task and less waste overall.

The top 3 changes to make in hotel operations to increase ROI:

1. Hire the Best General Manager You Can

Your hotel’s general manager is like the lead singer in a rock band – your GM is the face of the hotel and sets the stage for everything that happens in it. She or he will set the work standard and the guest service standard in words and by example. The general manager is looked to for advice, help and motivation. Who the general manager is is often a factor in employee retention. On the manager’s shoulders rests the ultimate responsibility in the eyes of each guest. This is a big responsibility and deserves a pay check that reflects this. When cutting the expense pie, allocate a little more than you normally would to finding and recruiting your general manager. You’ll be pleasantly surprised by the payback.

2. Create a Comprehensive Hotel Operations Plan that Covers All Details

It might seem mundane to dig into the far recesses of the operations plan, but it will pay off. For example, staff salaries are always taken into consideration when creating a budget, while choosing to replace all incandescent light bulbs with energy-efficient LEDs might not get any attention at all. It doesn’t take too many small, carefully weighed changes to make a big dent in overall expenses. Not all hotel managers or hotel management companies set a standard that is heavy on details. Look for this when choosing who will be entrusted with your hotel.

3. Invest in Time Management Training

When having your employees trained, choose a company that puts an emphasis on efficiency. Without specific direction and training, employees may not know what they should be doing when all known tasks are complete or how much time each of their daily tasks is expected to take. This inevitably leads to wasted time, bored employees and overlapping efforts. In contrast, with time management training, employees can increase their productivity each day without a lot of extra effort. When fewer employees can do more, profits increase.

The AHA Takeaway

There are always many ways to achieve a desired outcome and in hotel operations, there are countless creative changes that could boost ROI when implemented. Choosing a company to manage hotel operations is a big, important decision. When deciding, look to their standards as high operations standards have a tremendous impact on profit.

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– Tom Baker, Managing Principal

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