Hotel Budget Planning: What to Examine for 2019
Is your hotel still busy with hotel budget planning?By Chandra Chakravarthi - Content Marketing Specialist at Sertifi
Hotel Budget Planning: What to Examine for 2019
When most people hear the word autumn, they picture leaves changing colors, crisp weather, and pumpkin spice in foods and beverages. For hoteliers, there's another season alongside it: hotel budget planning.
Hotel budget season is the perfect time for you and your team to evaluate the need for new technology. However, before you move forward with purchasing new software, take a step back, and look at your existing budget. Should you reduce spend in one area and reallocate that money in another area? Do you need to increase your overall budget? These are normal questions to think about. One of the best investments you make for your team and hotel is in new technology to maintain a competitive advantage.
I recently went through the process of reevaluating my own personal budget when I became a first-time homeowner. Making the transition from renting to ownership meant a new set of responsibilities. I took a closer look at my current budget and determined where I needed to curtail expenses and shift money around to purchase additional items. Additionally, I kept in mind that whatever I bought should be a long-term investment without compromising on quality and what I liked aesthetically.
If you're still focused on hotel budget planning, here are 5 key factors to examine so you'll have a successful upcoming year.
1) Look Around Your Industry
When it came to furnishing my new home, I looked to the current home décor trends to determine what I'd like to invest in. Some trends were timeless, but there were other ideas that I knew would never suit me. While I'm still on the fence about which specific style I'll incorporate throughout my home, it's been helpful doing the research because I'm learning about colors, patterns, and how best to utilize different spaces. I want my home to grow alongside me so when the time comes to sell it, the home value will have appreciated.
Regardless of what industry you work in, it's always a good idea to pay attention to what's trending in your respective space. Those trends can dictate where your hotel's team should concentrate their resources and efforts to better communicate and connect with your guests. If you want your hotel to be viewed as an innovative property, then it's essential to keep investing in new technology that enhances the guest experience and increases your team's efficiency.
For example, AI technology is continuing to weave itself into different areas of our lives and will continue to fundamentally change the customer service experience. As of this year, 15% of American adults indicated that they've used a chatbot to interact with a company. Several hotels have embraced chatbot technology including the Cosmopolitan of Las Vegas, AccorHotels Mercure brand, and Intercontinental Hotel Group's Hotel Indigo providing a quicker, on-demand guest experience. Chatbots aren't likely to replace human interaction though. Instead, hotels can utilize this tool for handling repetitive customer inquiries freeing up staff to focus more on creating personal connections.
2) Receive Guest Feedback
When I was in the process of purchasing my home, I subscribed to several different interior design and home décor blogs as well as online furniture stores. The amount of emails that I received was exciting, but also overwhelming because everything sounded like a wonderful idea to me. Additionally, I received all types of advice from friends and family. Their feedback has been valuable because some of the tips are relevant to my current situation. And some of the other feedback will be beneficial when I move again the future.
Guest feedback is another source to examine during the hotel budget planning process. While some feedback may not be insightful, there will be instances when you extract some valuable information that helps determines where to invest in new technology.
For example, let's say that your guests have commented on how the check-in process is inconvenient because they can't do it using their smart phone. Today's hotel guests are tech-savvy and heavily rely on their smart phones to perform day-to-day tasks. Considering that the average person checks their phone every 12 minutes, offering mobile-check can be a worthwhile investment. Keep in mind that when you offer an electronic method that it's user-friendly, so it isn't disruptive to the guests. And continue offering the existing method as well. Going back to the check-in example, there will always be people who prefer face-to-face interaction so offer that option alongside mobile check-in.
3) Find Out Your Hotel's Goals for the Upcoming Year
Before you can determine what technology, you want to invest in, you need to have a clear understanding of your hotel's goals for the upcoming year. Here are a handful of questions you can ask yourself and your team: What areas can you improve the guest experience? What are the KPIs your team measures their success against? What are your departmental goals? Do these goals align with your hotel's goals? Once you have the answers to these questions, you can decide whether a new software solution is essential in helping you attain those goals.
Another way to identify your hotel's goals is to look at your Property Management System (PMS). There should be historical data residing in there, such as your previous year's bookings and revenue numbers. By reviewing historical data, you can forecast some realistic revenue goals that you want to achieve for the upcoming year.
Of course, relying on historical data and analytics isn't enough. Initiating interdepartmental collaboration and meeting with your team will help you determine what's a priority for the upcoming year and what can be put on the backburner.
Additionally, think about your existing hotel technology stack. Does your hotel use several different software platforms that aren't seamlessly connected? Take advantage of software solutions that integrate easily into multiple systems to reduce operational inefficiencies. Ideally, look for tools that integrate into your PMS to reduce manual processes. Investing in hotel technology will give your property a competitive edge in an oversaturated market.
4) Improve Current Business Processes
When I was filling out the paperwork to buy my new place, it was a manual process that consisted of printing, scanning, and faxing various documents. At times, it was time-consuming and disruptive because I had to go out of my way to send this paperwork back to the realtor and lawyers I was working with.
There are some manual tasks that can be crippling to your productivity, which in turn impacts the guest experience. While that varies with each organization and department, take time to evaluate the manual processes that exist within your team. See if there is a way to take a specific process and automate it so that your team can focus on more pressing matters. Productivity isn't the only advantage in streamlining processes. Repetitive tasks can lead to human error but automating certain tasks can reduce the likelihood of that occurring. For example, rekeying guest credit card information is a manual task that can be eliminated if you have a payment solution that integrates into your PMS. Or let's say your hotel uses paper-based credit card authorization forms. There's a lot of administrative work that goes into sending and receiving paperwork. Your team can create a more seamless process by choosing a technology solution that digitizes those tasks.
5) Conduct a Security Audit
One area that your hotel's team should continually scrutinize is where there's a possibility for a data breach. As technology continues to evolve, so does the likelihood for cybersecurity threats. According to the Verizon's 2018 Payment Security Report, the hospitality industry fell behind at 38.5% for maintaining PCI-compliant standards. It's up to your hotel to keep cybersecurity high on their radar, and you can do this by investing in software that protects credit card data, so your team doesn't have to store it on-site or in emails. All it takes is one incident to lose the trust of your guests and create a negative perception of your hotel which could result in a loss of revenue and potential new sales. Take proactive steps to combat any potential threats. While it's easy to convince yourself that it couldn't possibly happen at your hotel, the unfortunate reality is that anyone can be exploited.
Invest in tools that help your team be proactive versus reactive. Take time to research what's going to provide a better guest experience, improve internal workflows, and enforce PCI compliance and security. It's easy to get drawn in by all the available solutions out there but find a tool that will benefit both your hotel and customers. Ultimately, investing in the right technology is what will propel your hotel forward.
2019 Hotel Budget Planning
Is your hotel still busy with budget planning for 2019? If you're looking to propose a business case for new technology, then download the business case template for this hotel budget season and beyond.
This post was originally published on Sertifi's blog.
As the Content Marketing Specialist at Sertifi, Chandra loves all things related to writing and reading. She supports the team with content creation and overseeing the social media channels. Outside of Sertifi, you can find her exploring Chicago, recipe testing, trying out a new fitness class, or planning her next trip so that she can add to her growing postcard collection.FinanceLodging IndustryPCI ComplianceGuest ExperienceGlobal