Alternative use of hotels: How to do it?

Alternative use of hotels: How to do it?


In line with the ongoing effects of COVID-19 hindering the activities of most hotels, many hoteliers are attempting to repurpose their properties to sustain and adapt to the new norms. But how to do it right? HotStats explains.

Measure costs

By digging into costs, hoteliers can see where money is currently flowing. Regardless of what type of alternative revenue source a hotelier chooses to pick up, it should be driven by cost and profit. By keeping a finger on the pulse of expenses, hoteliers can make sure those new moves aren’t burning through even more cash. Here are some costs to examine labor costs by department, property and maintenance costs, payroll, and utility costs.

Get a handle on revenue streams

If the goal is to use the hotel to open up new revenue streams, it’s important to understand the size and scope of revenue streams that are already flowing. More importantly, hoteliers will want to pin down how each revenue source contributes to the hotel’s profit. 


Pore over revenue data per each department and stack those numbers up against total revenue. From there, hoteliers will see where they can cut back programs and how much a new endeavour will contribute to big-picture profit. 

Identify the hotel’s needs and capabilities

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For some, adding alternative income sources to a hotel’s repertoire may be an emergency move to keep the lights on through the current crisis. In other cases, hoteliers may find that alternative uses are so valuable they’re worth incorporating long term. In all instances, it’s important to start by diving into hotel metrics, understanding the hotel’s spaces and setting up a strategy. That means examining operational figures, determining the hotel’s break-even point and homing in on profit-focused metrics, such as gross operating profit per available room (GOPPAR).

Fit alternative hotel uses into a broader strategy

Above all else, before picking up any alternative uses for hotel space, hoteliers should pause and make sure moves fit into a broader hotel performance strategy. That requires digging into hotel profit benchmarking and mapping out a plan toward profit. With the right data in the driver’s seat, hoteliers can swerve around COVID-19 consequences and race on to a more profitable future.

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