Owners, operators on how to stay profitable in 2020
As 2020 begins, owners, operators and asset managers share strategies for coming out on top in terms of driving profitability after a tough year of slowed economic growth and increased costs.
Maintaining profitability was the name of the game in 2019 as costs continued to rise, labor pains hit hard and revenue-per-available-room growth slowed, and 2020 is expected to follow suit, according to sources.
But with creativity and the willingness to rethink processes, hoteliers are already on a path towards driving revenue while reducing costs and maintaining guest satisfaction. Hotel News Now reached out to owners, operators and asset managers for their 2020 strategies. Here’s what they shared:
Joseph Bojanowski, president, PM Hotel Group
“In today’s environment, cost reductions alone can no longer make the difference when preparing for a low-growth economic environment. Hospitality operations changed forever after the Great Recession, and arguably, never returned to their pre-2008 baselines. At PM Hotel Group, we’ve embraced a multipronged approach to maximizing efficiencies. We’re leveraging innovation and technology, embracing (artificial intelligence), incorporating automation and robotics where it makes sense. We’ve developed The Edge by PM Hotel Group, a custom suite of technology tools that allow us to drive revenue, reduce expenses through efficiencies and maximize asset value for our owners and investors. (It) enables our hotel teams to utilize real-time data to optimize efficiencies throughout the business cycle—from business intelligence and procurement to labor and human capital.
“Headed into 2020, we’re keenly aware that maintaining profitability requires creative thinking and a real willingness to rethink processes. Like many of our peers, we’ve historically experienced compounded annual growth of 3% to 5% in insurance expenses. As a direct result of new policies and protocols we implemented across the portfolio, next year our premiums will stay flat—a huge savings for our owners.
“For us, the numbers speak for themselves. In 2018, we saw GOP margin growth of 8.7% for our portfolio and that trajectory has continued in 2019 with 4.7% GOP margin growth. It’s never easy, but we’re confident we have the right team in place to keep evolving and deliver results for our owners.”