Improving Hotel ROI – Thinking Out of Box from Design to Operations

As an industry there is a need to make hotels more viable. The pandemic has taught us to rethink in this direction and develop hotel assets that can drive higher ROI. It can only be done when we look at making changes from Design to Operations. Ideally, we should make changes to the industry status, compliance cost and interest cost, however, as these are policy matters, we cannot do much ourselves. Meanwhile, cost of construction, cost of operations i.e. the largest expenses related to utilities and manpower, are aspects that can be controlled by the hotel investors, brands and operating teams effectively.

Below are a few recommendations and suggestions for hotels in this regard:

Energy cost optimization

Build energy infrastructure to cater to blocks of spaces without impacting the experience i.e. should be able to operate fewer floors and shut down other areas whenever not required to lower cost of cooling when areas are not in use etc.

Use wind and solar power wherever possible, directional use of day light, reflective material on building façade to reduce heating.

Use heat pumps, LED, newer technology to reduce energy consumption, recycle water and run operations at the lowest cost.

Create Rainwater Harvesting where you can harness water.

Look at options of making DG sets, STP common to close by hotels in area where possible and share costs.


Creating workflows efficiencies / smaller but efficient spaces / cross-train associates with single set of uniform (no change across the hotel) so that staff can be utilized across any area.

Encourage change management process for associates to be able to work across a horizontal structure rather than vertical hierarchical structure.

Last but not the least, hotels should move to dynamic pricing for all large volume accounts and give discount as a percentage off on Bar rate like airlines rather than a fixed price to optimize revenues.

Post time: Sep-22-2020
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