[Skip to Content]Privacy Policy
Scottsdale, Arizona    602-714-2442         Connect With Us

Keys to Maximizing Profitability in Hotels

When operating a successful hotel, the first key ingredient is running the hotel like you are the owner. Put yourself in the owner’s shoes, and it is simplifies operating decisions as it’s your own hotel and you’re accountable.  There are many other aspects to maximizing profitability and the following are two other key areas - maximizing revenue and streamlining processes.


·         Maximizing Revenue
One of the most important keys to a profitable hotel is to address different ways to maximize revenue.  A key indicator to review is the RevPAR index gain/loss.  Are you wining or losing in the competitive set?  In winning this battle, it is integral to review market segments constantly and open and close these segments quickly.  In this case, speed kills. I mean slow speed. The revenue management process must constantly review the competitive set and market segments.  It is essential that you know what your competition is doing.  A simple example is to be cognizant of groups coming into the area. If a nearby hotel has a soccer club staying there, adjust your rates accordingly.


·         Streamlining Processes
Continuously reviewing the established processes in the hotel is crucial to maintain control and reducing payroll costs. The key is eliminating non value added tasks in processes but continuing to maintain outstanding service scores and high employee satisfaction. Hotel personnel that are trained properly and that work efficiently will have a positive impact on all three of these factors. When their routine processes are standardized and employees are properly trained – and held responsible and accountable – it will make both management and the employee more organized and efficient. Be it for the number of rooms cleaned, the number of deck chairs moved out by the pool or the way that the breakfast dishes are washed, streamlining processes reduces time spent and maximizes the number of tasks per associate during a given day.

In his article “How to Make a Bed in Under Five Minutes” Dr. Willam D. Fry outlines a process that will add hours to housekeeping staff’s day.  Other processes that can always be improved include laundry, food and beverage and maintenance. Utilizing SOP’s (standard operating procedures), task checklists, electronic to-do lists or workflow analysis will help any hotel property properly manage their processes.  One other key is to recognize that if a task is eliminated, it does not always equate to reduced payroll. This extra time could be used to focus on an area of guest satisfaction that is below the standard or is a core objective. An example is if a task is eliminated for a housekeeper, the manager can review the guest satisfaction scores and have the housekeepers focus on the specific areas to increase guest satisfaction. This objective takes time and must be monitored over a period of time to ensure the specific area of guest satisfaction is being positively affected. As results are reviewed, adjustments can be made to achieve the desired results. 


Contact me for more information on PHD Hospitality, LLC and how we can make a difference. We offer management experience that will maximize your/our hotel’s bottom line.


What processes have you currently automated to make your property more profitable?