Forecasting and preparing your hotel’s budget is one of the most important endeavors that hotel management must spend serious amounts of time and effort on every year. Of course, things hardly ever shape out the way you expected them to, even when you’ve done your due diligence and performed a very thorough analysis of your budget.
Fluctuations are always going to occur. Fluctuations in demand, in your labor costs, in staff productivity levels, inventory prices, and more, will always occur. This is especially true for your housekeeping department.
Cost control in the hotel housekeeping department should always be at the center of your budgeting, simply because a hotel’s housekeeping expenses tend to represent a significant percentage of the costs of running your property.
The goal is to create a housekeeping budget that is both cost-effective and robust enough to handle any surprise expenses you might encounter along the way. The best way to forecast and create a hotel housekeeping budget is by looking closely at both your expected operational and capital costs.
When creating an annual housekeeping budget, managers need to take into consideration past performance and costs and combine them with data-driven projections in order to calculate future expenditures as accurately as possible.
Let’s take a deeper dive into how hotel management can take a critical look into housekeeping costs in order to create a new hotel housekeeping budget that will hopefully be as cost-effective as possible.
What Types of Hotel Housekeeping Budgets Exist?
Budgets are categorized by the type of expenses that are involved and how flexible these expenses are from department to department.
In terms of expenditures, the housekeeping department (and most other hotel departments) need to focus on two types of budgets; operating and capital.
Operating Budgets
When it comes to formulating an operating budget, your housekeeping managers need to take into consideration all of the routine operations that make up the day-to-day tasks of your housekeeping staff.
In housekeeping, the brunt of a hotel’s expenses is allocated towards the salaries and labor costs of the housekeeping staff. Operating costs also include inventory items such as cleaning products and other guest supplies.
Capital Budgets
When we talk about capital assets in hotel management, we’re talking about things such as furniture and equipment—assets that have a considerably longer life span than inventory items that are used up on a daily basis.
If you want to get more granular with your budgeting, you can divide both your operational and capital budgets into fixed and flexible budgets.
The fixed part of the budget is made up of expenses that are not dictated by revenue and don’t change over time. For example, your hotel might decide on an advertising budget for the entire year and stick to it. A flexible budget is based on the revenue that your hotel expects to see and usually changes in accordance with your guest headcount.
Decreasing Operational and Capital Hotel Housekeeping Budget Costs
Now that we know what housekeeping budgets are and how they can be divided and organized, let’s talk about what property managers can do to make them more cost-effectively. As always, don’t forget that guest satisfaction should always be your number one priority and that cost-cutting should never come at the expense of providing a great experience for the people who stay at your hotel.
And since we already talked about operating and capital budgets, let’s stay with that format while discussing what steps your hotel management can take to save money and increase the accuracy and efficiency of your hotel housekeeping budget in each of these phases.
Operating Budgeting
When it comes to decreasing operational costs in your hotel and cutting down on spending, the key is always better organization. The best way to decrease your hotel housekeeping operating budget is by installing processes and protocols that are going to increase the productivity and efficiency of your housekeeping team.
Investing in state-of-the-art housekeeping software can obviously help make this process much easier by putting the data and visibility you need to make better business decisions in the palm of your hands.
Let’s take a look at some of the key steps that you can take to cut operating costs in your hotel housekeeping budget.
Use Data and Analytics
The main advantage of integrating technology into the way you manage your housekeeping team is obviously the convenience that it introduces to the entire team. The second biggest advantage is the incredibly easy and clear access to data and analytics that it can give you—numbers that can be harnessed to budget better and easily see where you can be saving money in your operating costs.
Analytics can help you to perfect your housekeeping team schedules to avoid under or overstaffing issues (both of which can cost your hotel a lot of money). You can also look at data related to cleaning times based on room size, number of guests, length of stay, and more, in order to make more accurate projections. Being able to predict how long it can take to clean a room based on these data points will help you organize and assign your staff better as well.
Having actionable analytical insights available allows your hotel’s management to make decisions that are backed up and driven by data. This data can be used to not just improve your housekeeping staff’s performance but also optimize your financials.
Optimizing Training Efforts
Once you’ve organized your housekeeping staff to improve efficiency, the next piece of the puzzle is making sure that they are doing their jobs well. The costs of having poorly trained staff are manifold. This can obviously lead to bad reviews and a decrease in bookings and guests. But it can also lead to a waste of cleaning products, towels being ruined, even capital losses such as equipment malfunctions.
That’s why every effort towards decrease your housekeeping budget costs should start with proper education and mentoring. The better your housekeepers are at doing their jobs, the less it will cost your hotel.
And here’s an added bonus; money saved through efficiency and proper training can be used to keep your staff happy and motivated and retain your best housekeepers through increased wages and rewards.
One more benefit of better training programs is that they will improve the safety of your housekeeping staff, which will, in turn, decrease the number of accidents and injuries that occur on your property. As any hotel manager knows, the greater the number of workplace injuries, the higher your insurance premiums will be.
Training, auditing, and evaluating your staff is yet another aspect of the job that can be significantly streamlined with the help of technology and providing your staff with housekeeping checklists to aid their learning and their everyday work is a great place to start.
Capital Budgeting
Your hotel’s preventive maintenance procedures are very important when it comes to budgeting your capital assets, since performing regular and routine maintenance of these assets can make your capital expenditures much more predictable and, certainly, decrease them.
But outside of performing regular maintenance to avoid urgent repairs and the problems (and costs) associated with these types of situations, here are some other practical tips for decreasing the money you spend on your hotel housekeeping budget.
- Recalibrate your washer and dryer regularly to keep gas and electricity costs low.
- Wash linens and towels at night to take advantage of cheaper electricity rates.
- Wash at full capacity whenever possible.
- Seek out green programs and government incentive programs when purchasing new equipment.
- Save on paper products. While you might spend more on things like toilet paper to keep customers comfortable, there are other areas where you can surely save money. The cheapest type of paper is usually unbleached and post-consumer recycled.
- Reduce solid waste by getting serious about recycling.
- Digitize paperwork whenever possible.
Final Thoughts
Obviously, the best-run hotels are able to save money and cut costs across the board, not just in the housekeeping department. But being that housekeeping is easily one of the most expensive hotel departments, it's definitely not a bad one to start with when trying to nail down your budget and find ways to cut unnecessary expenses.
Hidden costs and surprise expenses are always going to sneak up on you. Being able to budget better enables you to handle these surprise expenses more easily when they occur.
When business isn’t necessarily booming, hotels are sometimes forced to cut costs in any way possible. Unfortunately, management often succumbs to pressure and responds with the knee-jerk reaction of cutting staff hours to decrease costs.
Hopefully, we've demonstrated in this post that there are many other areas of the budget and housekeeping processes that management can look at before resorting to cutting staff hours or staff in general. Getting creative and analytical about your housekeeping budget can help you to both save money and make sure that you always have enough staff working at all times to keep your guests elated.
