Tightening Operations Can Increase RevPAR
By Connie Rheams Global Business Development, Altiuspar | January 27, 2012
Recent "commoditization" of the hospitality industry has encouraged companies to compete on price, and achieving differentiation through service has required higher investment (higher quality, shorter operation cycles), reducing overall profitability.
Every year, surveys are conducted that clearly outline companies' need to reduce costs and increase operational efficiencies. Many companies have already made great headway in accomplishing this goal by reducing complexity, implementing best practices and leveraging best-of-breed technologies.
While the hotel industry has experienced strong revenue growth over the past few years, however, bottom-line performance has eroded since 2000, due to escalating expenses, including "non-controllable" costs such as utilities, insurance and government regulation. These costs - along with "controllable" costs such as payroll, staffing and marketing - are expected to only increase in the years to come.
Technology can hold the key to not only driving and enabling substantial product differentiation but also to significantly improving operational business processes - from real-time access to inventory, transparency across multiple channels, seamless exchange of operational information and performance data to the other spectrum of allowing hotels to centralize personnel.
The Goal: More Revenue at Less Expense
The ultimate goal for any business is to increase revenue while minimizing costs associated with operating that business. Below are five reasons why a hotel needs to look at efficient uses of technology solutions in its effort to increase RevPAR and affect the bottom line in other less tangible yet important ways: