However, increasing costs may also be a sign of inefficient and ineffective management strategies being utilized.
The first step to any solution the chain may choose to implement is a review of current policies and structure of the organization. Oftentimes, greater efficiencies can be achieved simply by implementing standard policies and procedures for employees to work within (Jones, 2005). Second, the chain may analyze units for profitability and determine they simply cannot be competitive in certain areas, choosing to close the units rather than continue to lose money. However, if the evaluation reveals that they can be competitive, management needs to analyze the costs they currently are incurring.
Some costs are unavoidable and unchangeable. However, even some fixed costs can be lessened with some shopping around. As such, even these should be analyzed to identify areas of savings.
In the hotel industry, labor is perhaps one of the most flexible areas where managers can shave costs. To implement cost savings in the human resources area, managers must first reevaluate their staffing needs. Staff that can multi-task are more efficient and more effective, and by combining job duties,...
In addition, the hotel chain needs to ensure that they are staffed appropriately for the fluctuating demands of the hotel. Mornings, for check out, and afternoons for check in, are often busiest, as are Fridays and Sundays, for the same reasons. Other than these peak times, staffing should be minimal.
In the end, declining revenues and increasing costs may be out of the hotel chains control. In these instances, the hotel chain can feel confident that their competitors are feeling the pressure as well. However, when these are due to internal factors, such as poor perceived value or improper staffing, the chain must take action or fail to be competitive in the industry.
References
Garrahan, M. (19 Jul 2005). Hotels see drop in bookings as tourists cancel trips to capital. The Financial Times. Retrieved July 21, 2005, from InfoTrac database.
"Hotel insurance expense: Minor cost, major concern." (13 Jun 2005). Business Wire. Retrieved July 21, 2005, from InfoTrac database.
Jones, L. (May 2005). Organization and structure: Aids to productivity for small business owners." Georgia Trend, 20(9). Retrieved…
