‘Throw Out the Old School’: Rethinking Labor Management at CYBER HITEC

4 November 2020
  • Photo: lodgingmagazine.com

Lodging Magazine

"Labor is an investment and not an expense." That was among the key themes of a virtual session led by Del Ross, chief revenue officer for Hotel Effectiveness, during CYBER HITEC on October 27, 2020. During the presentation, Ross reviewed traditional methods of labor planning and management and how a more data-driven approach can help hotel owners and operators deliver the same quality service more efficiently to achieve cost savings among other benefits.

"Labor represents the largest share of operating expenses on a regular basis by far," Ross noted, breaking down labor into three types: Base hours, or the staff necessary to operate the hotel; flexible hours, or staffing driven by factors like occupancy; and extra hours that are devoted to specific investments or areas like preventative maintenance. To treat labor as an investment rather than a cost, hoteliers must define the return on investment, Ross explained. The ROI for labor is productivity rather than direct cash, "although it does lead to cash," Ross noted. "Your expectations for every dollar that you invest in labor should be outputs measured in productivity. What are the things you're hoping to accomplish with that labor investment? Every single type of investment requires a different expectation of labor."

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