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"We’ve been able to pinpoint—down to the penny—overages and overtime, our margins have certainly improved!"


Management Company in LA


A Hotel Effectiveness client—a 120-room select service hotel with strong RevPAR—was having issues with its gross
operating profit (GOP) margins including overtime, labor costs and distribution expenses. Two years ago, the hotel began
experiencing a steady uptick in overtime hours due to increases in occupancy combined with a tight labor market. Creating
more of a challenge was the significant increase in hourly wages—some roles were up by 25%+. And, distribution costs have been
on the rise.

All these cost increases posed a problem for the hotel’s management company: How can it hit its targets to earn the incentive fees built into its contract while reducing costs? The staff is made up of 40 people, blending longtime employees with newer hirers. The hotel has 10 different job positions including supervisory roles. Since opening 15 years ago, the hotel has welcomed a balanced mix of leisure and business travelers—with particularly healthy weekend bookings, which include room-only guests, plus small groups for social events and sports teams.


The management company brought in Hotel Effectiveness to address the hotel’s challenges with a smart labor management
solution—to create smart schedules and avoid overspending on labor. With a PerfectLabor® solution implemented, right away
the GM quickly focused on the major labor cost drivers that were causing additional spend for the hotel. Department managers
took note of how helpful PerfectTime™ was—Hotel Effectiveness’ smart scheduling tool—giving them significant time back
in their day since the manual process was eliminated. Plus, as soon as their team started using the MyHotelTeam™ portal,
questions and issues about schedules dropped dramatically.


The positive impact to the hotel’s bottom line was significant. GMs and leadership are now able to manage labor costs even
easier with the new mobile app. After just three months with Hotel Effectiveness, the VP of Operations noted these impressive
results in the hotel’s operation:

CS #1


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