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Running Lean, Not Empty: Turning a Demand Slowdown Into a Margin Engine

Why "Running Lean" Beats "Waiting it Out"

By Corey McCarthy CMO, Unifocus | June 2025

Running Lean, Not Empty: Turning a Demand Slowdown into a Margin Engine

For the first time in four years, U.S. hoteliers are staring at a genuine cyclical crosswind: topline erosion combined with cost stickiness. RevPAR in upscale and upper-midscale is receding 4–5 percent year-over-year, and wage inflation still burns 11 percent hotter than last winter. In this environment, patience is expensive. The only sustainable advantage is the ability to reshape labor and operating inputs in real time—shrinking them when demand softens, expanding them when pop-up revenue appears. Done right, that agility doesn’t merely protect profit; it compounds it, because every point of flex you build now will amplify flow-through once the cycle turns.

The Downturn Math—Now With Operations Front-and-Center

Revenue pressure is obvious, but the hidden drag lives below the GOP line. Energy, chemicals, linens, and replacement parts all surged 8 percent last year, and procurement discounts negotiated in boom years rarely re-price downward as fast as RevPAR. Meanwhile, labor still represents roughly half of controllable costs for a full-service hotel. That means the hotel P&L has three multiplying factors—rate, volume, and efficiency. With the first two tilting against us, only the third is in our immediate control. Operational variability, not austerity, is the lever that preserves owner confidence and service delivery simultaneously.

• Demand slack: PwC pegs 2025 RevPAR growth at a meager +1.5 %. CBRE Commercial Real Estate Services

• Sticky wages: STR/CoStar shows labor PAR up 11 % in 2024 and still climbing. STR

• Ops inflation: Energy and consumables rose 8 % last year (CBRE Utilities Benchmark), turning every housekeeping cart and boiler room into a cost hotspot. CBRE Commercial Real Estate Services

With payroll still ~50 % of controllable costs for full-service hotels, every un-optimized shift or over-heated laundry cycle torpedoes GOP flow-through. The fix isn’t blanket austerity—it’s surgical variability in both labor and operating inputs.

Real-Time Labor: Cut Hours, Keep Service

Traditional weekly scheduling assumes demand moves like a river; 2025 is more like a tide that can reverse twice a day. By wiring your PMS to feed 12-hour pickup into a rules-based scheduler, labor becomes as fluid as the booking curve. One Virginia resort watched occupancy drop from 82 percent to 67 percent in forty-eight hours when a sports tournament canceled. With automated rostering live, the team trimmed 310 housekeeping hours and avoided overtime headaches—yet guest satisfaction held at 92 percent because staffing levels still met the revised forecast. Speed, not slash-and-burn, delivered the savings.

Start where savings hit fastest: scheduling.

  • 12-hour demand feeds—pull pickup data at noon and midnight.
  • Algorithmic rostering—AI matches skill, wage code and legal rules to the freshest forecast.
  • Instant re-shapes—mid-shift cancellation? The platform offers voluntary go-home options before overtime kicks in.

Hotels that replaced spreadsheet rosters with cloud WFM cut labor hours 8–12 % in two pay cycles while guest satisfaction stayed flat. Internal audits attributed the lift to faster redeployment—not headcount cuts.

Housekeeping & Task-Level Efficiencies That Pay in 90 Days

Housekeeping is often viewed as a fixed rhythm—8 a.m. boards, 4 p.m. punch-outs. But rooms don’t behave so politely in a downturn. Shorter lengths of stay, transient walk-ins, and late cancellations create a moving target. A predictive housekeeping engine can flag likely stayovers and downgrade them from full cleans to light touches before the day even begins. That alone saves six to eight minutes and a pound of linen per occupied room. Couple that with dynamic zoning—where routes redraw at dawn based on live pax counts—and your attendants walk fewer miles, finish earlier, and still meet brand standards. Engineering, meanwhile, can piggyback on those same task sheets, resolving minor defects before they cascade into out-of-order inventory. Together these micro-shifts drive a material $3.10 savings per occupied room inside one quarter.

  • Predictive Room Turns Feed expected checkout time + stay length into the housekeeping module. Rooms flagged as likely stayovers shift from a full clean to a “light touch,” trimming 8–10 minutes per occupied room—and thousands of unneeded linen pounds.
  • Zone-Cleaning 2.0 Dynamic zoning groups rooms by floor and by anticipated service level. Supervisors launch a quick “route rebuild” each morning; attendants walk fewer miles and finish shifts on time even when occupancy whipsaws.
  • Integrated Task Sheets Connect engineering, housekeeping and front desk tickets. A room attendant who spots a loose faucet logs the ticket in-app; engineering picks it up during the same room release. Fewer double-entries; quicker room availability; happier guests.
  • F&B Prep Auto-Scale Tie breakfast prep staffing to the real-time in-house count at 3 a.m. Kitchens avoid cooking for phantom covers, slashing both labor and waste.
  • Case portfolios adopting the four plays report an average $3.10 labor + supplies savings per occupied room inside one quarter.

Compliance—Your Invisible Profit Shield

When margins shrink, fines sting twice as hard. Meal-break breaches, predictive-schedule violations, and split-shift miscues can erase a week of careful labor trimming in one state audit. The simple fix is to push compliance controls forward in the workflow. Let the roster engine refuse to post if it sees a break violation; let digital acknowledgments create an audit trail without a single paper signature. A Chicago full-service hotel avoided $120 K in penalties last quarter by catching break variances before payroll closed—pure profit, invisible to the guest, undeniable to the owner.

California, New York and Chicago’s fair-workweek fines didn’t pause for recessions. Turn rule engines from “back-office burden” to frontline guide-rails:

  • Pre-publish violation blocks—roster can’t post if breaks or split-shift limits breach.

  • Digital receipts—employees e-sign rota changes; auditors find clean logs.

  • Real-time wage parity—system flags if tipped staff drop below federal or state minimums.

Reinvest Where Guests Feel It

Cost-cutting and guest experience are not mortal enemies; they’re dance partners if you direct the savings wisely. Plow roughly a quarter of captured payroll and supply savings back into touchpoints that guests will notice: an HVAC preventative-maintenance blitz before peak season, front-desk upsell coaching that lifts ADR by $4 on shoulder nights, or a free team meal that halves departure rates for hard-to-hire roles. Divert 25 % of the captured savings to high-impact moments:

  • Preventative maintenance blitzes that stop HVAC meltdowns—ADR premiums survive heat waves.

  • Front-desk upgrade coaching—a 2-minute upsell pitch nets $2–$5 incremental ADR.

  • Well-being perks—shift-swap freedom or free staff meals cut turnover, which silently erodes service more than any budget cut ever could.

These small reinvestments keep service levels—and online review velocity—intact, preserving rate integrity for the next demand upswing. Guests never cheer “great cost control,” but they do feel snappy elevators, cool rooms and motivated associates.

Talking to Owners, Boards and Lenders—With Bulletproof Numbers

Owners and lenders care less about “innovation” than about cash survival and expansion. Fortunately, math is on your side when efficiency is real. CBRE’s flow-through study shows every one-point RevPAR change typically swings GOP by 1.5–2.0 points. If RevPAR slips five points, but you cannibalize three points of labor and operations expense through variability, you buffer—or even neutralize—that hit. Cloud WFM platforms pay back in two payroll cycles on savings alone, according to STR P&L benchmarks, while HVS cap-rate analyses suggest a five-percent reduction in fixed costs can widen EBITDA multiples by up to 60 basis points. Those are the numbers that keep refinancing windows—and acquisition appetites—open even in a soft market.

  • Flow-through math: CBRE pegs average U.S. hotel flow-through at 1.5–2.0× revenue change to GOP. CBRE Commercial Real Estate Services Every labour hour you erase before a -5 % RevPAR slide protects ~30–40 basis points of margin.

  • Payback speed: Cloud WFM installs in 45 days on average; pilots show payroll savings covering subscription fees within the second payroll period—documented in STR P&L benchmarking. STR

  • Valuation lift: Cut fixed costs by 5 % and hold GOP stable; the multiple on EBITDA in HVS cap-rate studies expands 30–60 bps, translating to $1–$2 MM in asset value for a 300-room upper-midscale hotel. HVS

Give investors that story and they’ll applaud efficiency as loudly as topline growth.

Culture—Turning Staff Fear into Pride

People fear cost programs; they embrace improvement labs. Label your initiative “Flex-First” and promise two things: better life-balance through smarter rostering and full transparency of the scoreboard. Post daily occupancy and labor-efficiency metrics on a staff dashboard so housekeepers, cooks, and engineers see the same truth corporate does. When the team hits guest satisfaction targets and beats labor budget, celebrate in public chat. Turning staff into co-authors of efficiency transforms skepticism into bragging rights.

Your Ninety-Day Flywheel—Concepts to Cash

Most hotel transformations drag because they launch as sprawling “phases.” A flywheel mentality flips that: small changes spin quickly, build momentum, and self-finance the next turn.

  • Days 1–14 – See the enemy. Pull a full year of time-and-attendance, utility, and linen data. Share ugly truths with department heads so everyone owns the baseline.

  • Days 15–30 – Prove the speed. Activate 12-hour demand feeds and publish dual rosters (legacy vs. AI) to showcase gaps in real time. Celebrate the first avoided overtime shift as a win.

  • Days 31–45 – Attack biggest leaks. Launch predictive housekeeping and dynamic zoning; integrate task sheets so engineering and HK close work orders before rooms go dark.

  • Days 46–60 – Lock the legal gates. Turn on break-rule and fair-workweek guards that block non-compliant schedules. Compliance becomes proactive, not punitive.

  • Days 61–90 – Reinvest, report, repeat. Allocate 25 percent of verified savings to guest-visible upgrades (maintenance blitzes, staff perks). Document margin lift for owners—and rinse the cycle for F&B and spa divisions.

Each sprint maps directly to Sections 3–6 above, turning concepts into P&L reality—fast enough to matter this quarter.

Running Lean and Ready

A slowdown is the hospitality equivalent of altitude training. Operators who learn to breathe profitably on thinner revenue air emerge fitter, nimbler, and ready to sprint when oxygen—demand—rushes back. Variable labor, task-level precision, and compliance-driven guardrails aren’t defensive hacks; they’re strategic muscles. Build them now and watch them multiply margins for the next decade, not just the next quarter.

Ms. McCarthy

Corey McCarthy, CMO at Unifocus, has more than twenty years' experience growing brands in the media, tech and hospitality industries. With her role at Unifocus, Ms. McCarthy is tasked with bringing exciting advances in workforce management to the industry to help hoteliers increase staff productivity, retention, higher service quality and profitability. In her former life, she was the VP of Marketing for a global workforce communication platform that was awarded the Hottest Technology by ALIS and also won the TechOvation Award from HTNG. For many years, Ms. McCarthy was at the helm of her own firm where she worked with companies ranging from hotel franchise brands, technology, design, investment banking and retail firms that resulted in numerous mergers and acquisitions. She earned her MBA in 2010 from St. Mary's College of California where she honored in Marketing, Business Strategy and Organizational Behavior Management. Extended Biography & Contact Information

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This Agreement shall be governed by and construed in accordance with the laws of the State of California notwithstanding any conflict of laws provisions. You and HotelExecutive agree that the venue for all legal disputes, controversies, actions of any kind arising under or related to this Agreement shall be San Francisco, California. You and HotelExecutive further agree that in case of any litigation regarding this Agreement, you irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the state and federal courts in the County of San Francisco, California for any litigation or dispute arising out of or relating to this Agreement, (ii) agree not to commence any litigation arising out of or relating to this Agreement except in the California Courts, (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum, and (iv) agree the California Courts represent the exclusive jurisdiction for all litigation relating to this Agreement.

11. MEMBERSHIP FEES

Hotel Business Review Subscriptions

If you choose to purchase a subscription, member subscription payments can be made in U.S. Dollars, as well as a variety of international currencies. Membership terms are Annual Recurring, and Monthly Recurring. The Annual Recurring subscription is an annual commitment and subscribers will be charged each consecutive billing cycle. Annual Recurring subscriptions can be cancelled after the first billing cycle and within 30-days of the billing date for a full refund. Monthly Recurring subscriptions are ongoing and subscribers will be charged each consecutive monthly billing cycle. Monthly Recurring subscriptions can be cancelled after the first month and within 7 days of the monthly billing cycle for a full refund.

12. PAYMENT AUTHORIZATION

Payment for the services provided to you in, at, through or in association with HotelExecutive may be made by automatic credit card, debit card, direct debit, bankwire or Paypal and other approved payment means offered in, at, through or in association with HotelExecutive, and you hereby authorize HotelExecutive and its agents to transact such payments on your behalf.

You hereby authorize HotelExecutive's Internet Payment Service Provider to charge your credit card to pay for your membership to HotelExecutive. You further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card for any and all purchases of products, services in association with HotelExecutive. You agree to be personally liable for all charges incurred by you in association with your access or other use of any content provided by HotelExecutive or any third party in association with HotelExecutive. You acknowledge and agree that your liability for all such charges shall continue after termination of your access or any type of membership arrangement with HotelExecutive.

In the event that you have chosen to have your membership automatically rebilled, unless and until you notify HotelExecutive that you wish to cancel or terminate your membership to HotelExecutive, you hereby agree and authorize HotelExecutive's Internet Payment Service Provider to automatically renew your membership to HotelExecutive on a continuing basis and to charge your credit card (or other payment means you have selected) to pay for the ongoing cost of your membership. You hereby further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card (or other approved payment means you have selected) for any and all purchases of products, services and entertainment provided to in, at, through or in association with HotelExecutive.

13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

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