While hoteliers have adapted impressively to changing circumstances during 2020 and 2021, with Omicron on the rise, the new year could bring even more uncertainty. Unfortunately, there’s no hospitality playbook to help predict what’s to come – or how any surprises that pop up might impact the budget.
Or is there?
We collaborated with our in-house experts to put together Cloud5’s top 3 recommendations for how hotels can maximize their budgets (and even save money) in the New Year:
#1 – Investing in technology that supports growth
Technology has emerged as a hero for hotels during the pandemic. For example, a keyless entry has allowed hotel associates to abide by social distancing health protocols, speed the check-in process and give guests a greater sense of security. It has also driven more on-property interaction with hotel apps, leading to more room service orders and even encouraging direct bookings over third-party bookings.
Looking ahead, hotels should be ready to spend money on infrastructure upgrades and next-gen property management systems centered on the guest experience (GX). We recommend they also consider the operational and capital savings of a truly converged network that combines mobile key technology over a Wi-Fi network.
A converged network also offers enough bandwidth to support multiple guests per room. As leisure travel returns, which means multiple people per room depending on a strong Wi-Fi connection to check in with work, catch up with friends, or stream on multiple devices, this will be an increasingly important component for growth.
#2 – Conducting a telecom analysis
A telecom analysis involves reviewing a hotel’s telecommunications delivery. During this type of analysis, a consultant audits the monthly network spend and evaluates the hotel’s circuits and services. The objective is to catch circuits and services that are old, unused, overpriced or no longer needed.
The cost savings from a telecom analysis can be significant. For example, after a hotel partner with Cloud5, we run a telecom analysis as part of our service offering. As a result of this reduced-cost or no-cost analysis, Cloud5 customers have realized savings ranging from $5 per room per month to $15 per room per month. Common areas of waste are old circuits and plain old telephone service (POTS) lines, remnants of an analog telephone system that were never disconnected.
The analysis also opens the door to improvements that can reduce costs, such as consolidating circuits or combining services into one network. The savings from such actions can be used for technology upgrades that offer even more long-term savings.
#3 – Outsourcing guest services
GM turnover has been an ongoing challenge for hotels – Zippia research found that almost half of hotel GMs (48%) stay less than two years. Additionally, the downturn in bookings in 2020 led to layoffs of staff at all levels. While general unemployment decreased from 12.9% to 10.5% in November 2021, the travel and hospitality industry is still down 1.3 million jobs (8%) from before the pandemic.
“The hotel industry and real estate, in general, can continue to innovate, and you’re going to see hotels that maybe historically operated 22 employees going forward with 16 or 17. You’re going to see this lower labor model for two reasons: costs but also availability. People just left the hospitality labor force, and they’re not coming back anytime soon.” – Evan Weiss, Chief Operating Officer at LW Hospitality Advisors
A major way to compensate for this labor shift – and save money at the same time – is to outsource responsibilities previously handled in-house. Outsourcing can take advantage of economies of scale – particularly with services required across all the properties in your portfolio. This includes tasks that previously would have been handled by a dedicated property resource but that person must now manage multiple properties.
Virtual guest services – utilizing voice technology, online chat, and call centers to respond to guest requests – can free the front desk to focus on the guests in front of them rather than pull them away to respond to low-value guest calls – including for extra towels, dinner reservations and fitness center questions.
Routing these calls to virtual guest services – experienced Cloud5 agents trained on your hotel’s brand – lets guest-facing associates focus on in-person interactions at the desk and helps ensure no one’s experience is diminished even when staff levels are not as high as pre-pandemic.
Money-saving steps now, less stress later
Despite high hopes for the progress of hospitality in 2022, there’s no way to know what the New Year will bring. But one thing is clear – making infrastructure and hotel technology enhancements can put hotels on a firmer footing for whatever is in store in 2022. Investing in the right technology can help hotels attract more guests. Conducting a telecom analysis can help them catch and cut unnecessary costs. Outsourcing guest services can create better GX. Taking these three steps can trim your budget and strengthen your position into 2022 and beyond.
Ready to learn how Cloud5 can help? Contact us directly and let’s chat about your 2022 budget.