A high occupancy rate keeps hoteliers happy all the time. However, very few understand the concept of minimizing costs based on demand and supply. However, smart a hotelier could be, it is impossible to predict the customer inflow throughout the year. With advanced automation revenue managers can design a strategic sales plan to avoid unproductive costs and improve and retain profits.
According to reports from trusted sources, revenue leakages have caused immense losses to organizations across the world. It could be due to negligence or employee mismanagement at various levels. The artificial intelligence-based hotel accounting software provides data-driven solutions that give a clear picture of your business.
Investment and returns, the analytics throw light on areas, where the money is going to waste, without fetching any productive results. There are several advanced features associated with it, inventory management system and payroll processing.
The effective management of resources and the workforce is required throughout the year. Calculations associated with work hours, in addition, the software gives a detailed analysis of investment and returns for a particular period.
To avoid excess stock in the storerooms, Nimble’s hotel accounting system has an inventory management system to manage all the stock effectively.
There are several aspects where revenue leakages can be arrested or avoided. This detailed post discusses several aspects of revenue management in the property and throws light on various minimizing revenue leakages.
What does revenue leakage mean in the hotel business?
When you lose money because of a bunch of mistakes at different levels, mistakes that are usually not meant to happen and are not noticed, this is called revenue leakage. A big problem for almost all types of hoteliers is that money is leaking out of the business. It happens in most of the areas and departments that run your hotel. If you don’t do anything about it, revenue leakage can cost your hotel a lot of money.
Keep an eye on labor and manpower expenses.
Labor expenses constitute approximately 40 to 50 percent of the overall operating costs of hotels. Without compromising daily operations or guest service, substantial cost savings are undoubtedly achievable by reducing labor expenses. Analyze the productivity of each employee and determine how their efforts have contributed to the expansion of your hotel. Conduct an exhaustive evaluation to determine how many employees are required to keep your hotel operating efficiently.
If one concludes that a 20-person staff is sufficient to accomplish the task at hand, then maintaining an additional staff serves no purpose. When required, instruct and motivate your employees to perform additional duties beyond their assigned responsibilities. In essence, the staffing level of your hotel should fall between that of an excess and deficiency.
Implementing an intelligent property management system hosted in the cloud can also significantly boost the productivity and efficiency of your staff by streamlining and automating all of your daily operations. You are not required to invest in IT infrastructure or a dedicated IT team with Cloud Hotel PMS. Thus, there is sufficient room for you to reduce labor expenses, which would increase your overall revenue.
Implement strict stock & and inventory management practices
Be it your F&B inventory or other room-related inventory, you need to have a process to tightly control your stock to prevent wastage and theft that lead to revenue leakage at your hotel. Adopt a smart cloud-based hotel property management system that helps you have an efficient materials/stock/inventory management process in place.
The integration of Hotel PMS with a Hotel Accounting Software allows you to keep an eye on your available stock. It lets you know the stock that should be consumed on any given day/month so that you can plan the procurement process. You can also set alerts to know which items have reached the reorder stage so that you don’t place an order for those items to avoid overstocking as overstocking too can lead to wastage. Be it a soap bar, shampoo, towel, or food items, track product-wise consumption of all the materials and prevent wastage and pilferage.
Leverage the power of this Hotel’s PMS and POS system integration to view detailed reports about stock consumption and make the right decision. In simple words, you should be in a position to predict demand and supply rates with great accuracy to put a check on revenue leakage.
1. Automated Revenue Tracking
– Utilize the Hotel Accounting software’s automated revenue tracking features to capture and record all sources of income accurately.
Implement automated systems for room bookings, event reservations, and other revenue-generating activities to minimize manual errors.
2. Rate Management and Pricing Optimization
– Use the software’s rate management tools to optimize pricing strategies based on demand, seasonality, and market conditions.
– Regularly analyze pricing data to ensure that rates are competitive while maximizing revenue.
3. Integrated Reservation System
– Integrate the hotel’s reservation system with the accounting software to ensure that all bookings and reservations are accurately reflected in the financial records.
– This integration helps prevent revenue leakages due to discrepancies between reservations and accounting data.
4. Real-Time Reporting and Analytics
– Leverage real-time reporting and analytics features to monitor revenue performance.
– Set up alerts or notifications for any anomalies or deviations from expected revenue figures.
5. Dynamic Forecasting
– Implement dynamic forecasting tools to predict future revenue trends and adjust strategies accordingly.
– These tools can help identify potential revenue leakages by comparing forecasted and actual revenue figures.
6. Centralized Payment Processing
– Centralize payment processing within the Nimble Hotel Accounting Software to ensure that all payments are properly recorded and reconciled.
– Monitor payment channels and methods to identify any discrepancies or instances of revenue leakage.
7. Inventory Management
– Integrate inventory management features to track and manage the availability of rooms, facilities, and services.
– Ensure that the software accurately reflects the availability of inventory to prevent revenue loss due to overbooking or mismanagement.
8. Guest Loyalty Programs
– Implement loyalty programs within the software to encourage repeat business and customer retention.
– Analyze the impact of loyalty programs on revenue and adjust strategies accordingly.
9. Fraud Detection and Prevention
– Utilize the software’s fraud detection features to identify and prevent fraudulent activities that may lead to revenue leakages.
– Regularly review transaction logs and audit trails for any suspicious activities.
10. Comprehensive Reporting on Revenue Streams
– Generate comprehensive reports on various revenue streams, including room revenue, food and beverage, and other ancillary services.
– Analyze these reports to identify trends, patterns, and potential areas of revenue leakage.
11. Regular Audits and Reviews
– Conduct regular internal audits using the software’s audit features to identify and rectify revenue leakages.
– Review financial records, transaction logs, and reconciliation reports to ensure accuracy.
By implementing these strategies and leveraging the features of Nimble Hotel Accounting Software, you can effectively control revenue leakages, enhance financial transparency, and optimize overall revenue performance. Regularly monitor and update these practices to adapt to changing market conditions and business requirements.
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