Reducing Your Fixed and Variable Hotel Costs With Cloud Hotel Software
The hospitality industry is customer-centric and focused primarily on its guests. Customer satisfaction and experience are crucial to your success, but you probably already know this. But did you ever think about how your tech infrastructure and backend operations affect their experience?
Most hoteliers haven’t. Not only this, but they haven’t thought about how these systems affect their overall costs. In other words, hotel software is something that’s not on the radar with most owners and managers. Keeping your operating expenses as low as possible is essential to running a successful hotel.
With wasteful processes and high expenses, it’s crucial to have good profit margins. One of the ways to do this is to switch to cloud hotel software. Here’s how cloud hotel management software can help you reduce costs.
No installation expenses
Before we talk about operating expenses and some other costs that aren’t that visible, let’s start with the more obvious ones — installation. All on-premise solutions include a costly initial investment. Most importantly, hotels have to install servers within their premises, which costs a lot of money.
And, when we say “install servers,” we don’t mean only for databases, applications, backup, disaster recovery, but also for things like virus scans, intruder alerts, regular updates to all systems, etc. The goal is to have a hardwired infrastructure, like a lab, and manpower to manage hardware and networks.
In a lot of cases, these costs aren’t even one-time. On the other hand, cloud-based hotel software has no initial fees. There are no physical servers, meaning that hotels don’t have to build a digital infrastructure on their premises.
Naturally, cloud software uses a server in the cloud, but your provider pays these costs, and there’s no need for you to worry about them. The only important thing is to find a reliable cloud PMS with reliable servers so that your data is always available and secure.
No maintenance costs
Since we are talking about the cost of ownership, we should mention that cloud hotel software doesn’t have any maintenance or upkeep costs. A cloud solution removes all of the server-related expenses, and this doesn’t include installation only, but ongoing costs as well.
The service provider will ensure uptime, backup, no data breaches, and making sure that all the software is always up-to-date to ensure you get the latest features and that your system is always functioning at optimum levels.
Maintaining a server is expensive. You constantly have to invest in new hardware, connectivity, digital solutions, IT support personnel, and so on. The hardware and software side of things is non-existing in your organization.
The only thing that you have to do is teach your staff how to use your cloud PMS. Hotels with on-premise solutions have dedicated IT teams that work full time on maintaining their solutions, which can cost a lot.
Less billing errors, higher revenue
The billing process might seem simple, but in hotels, many mistakes can be made. This is especially true today when hotels offer flexible offers, amenities, hybrid models, and so on. It’s easy for hotel staff to mix up the guest’s services and bill for them.
If you bill people for more expensive services, they probably won’t pay you. On the other hand, if you bill them less than you were supposed to, they will say that the mistake was on your end and that you should deal with it. No matter what’s the case, these kinds of errors can cause a lot of loss.
Leaking revenue in this manner can lead to severe losses over time. The answer for this issue is a cloud PMS solution like Mycloud PMS that can give you an integrated accounting system to help by:
- Automating all of your direct billing at the front desk
- Provide 100% safety on payments and collections with integrated payment systems, smart alerts, and automated payment follow-ups
- Manage all of your deductions, payables, and invoices
- Auto-syncing your whole accounting system (which is designed with human errors in mind and where revenues can leak, hence it offers secure workflows and a process to ensure hotel policies are always followed and automatically sends alerts when a breach happens)
- Reduce losses caused by human error
Labor costs probably account for the most considerable portion of hotel expenses. Modern technology gives hotels the ability to do more with less. Convenience is crucial for cloud-based hotel PMS solutions. First of all, the same automation that we mentioned earlier can be used for defining staff roles, dealing with mundane tasks, and saving up time for your employees.
Cloud PMS solutions have a wide range of functionalities that can help boost productivity and therefore cut down on costs. For example, they support mobile apps which allow better communication between departments regardless of where they are.
This allows employees to run operations from a distance, share information in real-time, understand occupied rooms, coordinate housekeeping, and assign different tasks. Simply put, when your employees are more productive, you won’t have to hire more people to work for you.
Increase direct booking numbers
This is another essential operation of hotels that has been neglected for a long time. Lots of hotels work with third-party booking agencies to find guests. Even though this isn’t essentially bad, it can put a big dent in your revenue.
Hotels need to be independent and find guests on their own so that they can increase their profit margins and revenue. When you get a direct booking, there is no commission, and your margins are higher. But finding direct bookings isn’t that easy.
Hotel PMS solutions allow you to integrate with your website and manage bookings with ease. But at the same time, these tools can also receive bookings from OTAs regardless of the vendor. This allows you to connect to more platforms and perform better revenue management.
Lower utility costs
A typical on-premise system requires you to create a data center with multiple servers. Not only are these servers expensive to buy and set up, but they also increase your utility bills and also consume a lot of real estate as these need housing, cooling, and regular maintenance.
All of this will lead to increased electricity costs. With a cloud solution, all of the data is stored elsewhere and managed by your vendor. This means that you don’t have any additional utility costs. On the contrary, your electricity bills will be lower.
In the end, you should remember that cloud solutions reduce downtime by a large margin. With a cloud service provider, you also get access to dedicated IT support and maintenance. Best of all, you can try out these solutions for free to see just how beneficial they are.