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It’s a simple calculation. You increase profit by raising revenue, reducing costs or, ideally, both. But neither is simple to achieve. Consumers’ disposable income is limited and competition in the hotel sector is fierce. Meanwhile, labour costs, business rates and food prices are all moving in the wrong direction.

The good news is that there are still ways to increase efficiency and cut admin time. And not only does this help the bottom line, it also frees up managers’ time, so they spend more of it improving customer service and generating sales.

Here are our top five profit-boosters:

1. Get your hotel menu right

When it comes to food and beverage, one of the first things to look at is your menu. What are your best sellers and what makes you most profit? When ingredient prices go up, what happens to profit? Take a good look at your recipes and the numbers behind them. See the impact that changes might have by using ‘what if’ techniques, so you can identify where you can make savings and improvements.

2. Cut waste

Some companies are literally throwing away their margins, so this is an important one. We calculate that without effective waste management systems an organisation generally loses between 1 and 6% of sales potential. On the other hand, those with an integrated end-to-end system see an average 2% increase in gross profits.

The first step to control wastage in your business is to find out what’s being wasted and why. For example, your portions might be too big if a particular dish is regularly left unfinished. You might be ordering too much of a particular ingredient if it’s regularly going past its use-by date and being thrown away. Or, maybe your chefs aren’t preparing a particular ingredient correctly if you don’t seem to be getting the right number of servings from it. You need to collect and analyse the data, and then you can identify the issues and make savings.

3. Get purchasing under control

In our experience, many hospitality businesses still buy on an ad-hoc basis from a number of local suppliers. Not only is this more expensive, but it also means buying less from major suppliers and missing out on potential rebates. It’s also more efficient to make weekly orders from a small group of approved suppliers. Of course, you also have to balance this with the brand standards of your hotel, to make sure you have the right quality.

Whoever you buy from, it’s vital to control receipt and payment of goods. You can’t afford to pay for anything you haven’t ordered or had delivered, and although it’s common sense to check everything is in order (including the condition and use-by dates of delivered goods) many businesses simply don’t do it. Neither do they check the invoice against the original order and goods received note. The truth is it probably seems too much like hard work, so implementing a purchase-to-pay solution that helps manage this entire process will save you both time and money.

4. Put your data to work

Although people have been talking about big data for years, surprisingly few are making the most of it. Smart operators are using technology to quickly collect, analyse and understand huge amounts of data from different sources (such as POS, purchasing, customer sentiment, kitchen management and staffing) to drive efficiencies and give customers a better experience.

Using an analytics solution means you can automatically record every keystroke on the till, which provides transactional information that isn’t just interesting but also valuable. Not just what you sold, but when you sold it, what else the customer bought, who sold it and more. Combining this with other data in the business to gain a far clearer understanding of both performance and the reasons behind it, means you can constantly adjust your offer and your processes to increase profit.

5. Just do things better

Easier said than done, but every operator knows they have processes that could be faster, smoother and generally more efficient. We regularly come across hospitality businesses that could improve some critical processes within purchasing, invoice processing and inventory management. And technology can also automate tasks and save time in managing your workforce. Which brings us back to where we started – saving money and allowing your people to spend more time with customers and less time in front of a screen.

For more detail on specific areas where you can increase efficiencies and drive profit, download our guide to increasing hotel profitability.


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