If experience tells us anything it is that the best time to plan for the worst is when times are good.

The 20th annual Lodging Conference confirmed something that all of us already knew. Our industry remains on a roll. Occupancy rates continue to rise; average daily rate continues to increase; and revenue per available room continues to grow. Many markets now are seeing new development as the direct result of growing demand.

I certainly do cheer this great news, but I am a realist. If experience tells us anything it is that the best time to plan for the worst is when times are good.

How do we do that? Looking for ways to increase revenue, grow market share and develop more ancillary lines of revenue should be where we start. However, we also must pay close attention to the other side of the ledger sheet, specifically as it relates to labor costs. Finding ways to think outside the box to control costs, create efficiencies and adapt to meet the needs of a changing workforce will improve the bottom line now and lay a solid foundation for the future.

Addressing the labor issue

One area to address is payroll, which is the largest expense for hotels. The costs to manage the process, both from personnel and “hard cost” standpoints, are significant. As technology evolves and more systems move to the “cloud,” we should look at alternative payroll processing providers. Could there be more cost-effective payroll systems and “feature rich” human resource systems than the current “legacy” systems being used? Choosing the right system can allow a more comprehensive approach to managing human resources (our greatest asset) and lowering “per-check” costs.

Rising employee health insurance and benefit costs are constant challenges facing our business. You need to offer competitive benefit packages if you want to recruit and retain great people. Yet, for many of us, increasing premiums and decreasing benefits leads to a no-win situation. A self-insured health plan might be one answer. When structured the right way it enables you to customize the plan to meet the specific needs of your employees and also maintain control of the premium reserves to pay claims.

Speaking of great people, we all face the same challenge. And it’s not just competing with our industry peers to attract talent. We should look at recruiting from other service industries as well. We need to sell the hotel industry as one that provides great career opportunities. Creative scheduling options for younger workers might be more valuable to them than a pay increase. Providing unique opportunities to college interns to learn more about how a hotel runs its business is likely of more interest to them than would be sitting behind a cash register at the local coffee shop.

As we head full steam into the close of a great year and the beginning of a new one, we can’t be complacent. We need to stay ahead of the curve. Thinking outside of the box in some of these fundamental areas of operation will help us to prosper in both good and challenging times.