It’s no secret that the economic impact of COVID-19 has touched businesses of all sizes, from the smallest local stores to the biggest worldwide brands. Through our existing partnerships with hotels, Propark Mobility has seen the pandemic’s effect on the hospitality industry in particular, as its revenues, expense dynamics, and profitability so often reflect the global socioeconomic environment. Below, we outline three crucial areas to explore before making another financial decision for your company.
3 Cost Saving Opportunities
Renegotiate Management Fees
With hotels at nearly 50% occupancy during the third quarter and total revenue per available room (TRevPAR) down 57.6% since the start of the pandemic, as reported by STR.com, it has become increasingly important to reduce costs in all available business areas. In the case of operations or management fees, which can account for 20% of overall expenses, reevaluating and renegotiating could significantly impact costs when adjusting to the decrease in room occupancy.
Streamlining Managerial Positions
According to STR, gross operating profit per available room (GOPPAR), when compared to the same time last year, has fallen 78.8% since the pandemic began. This has resulted from expenses – especially General & Administrative (G&A) labor costs – remaining high despite the declining demand. Because of the changing socioeconomic dynamics, payroll expenses, like salaries and wages, have required adjustment in order to maintain business operations throughout the pandemic. To establish a long-term solution, the selection of a third-party vendor, like a parking operator, who has multiple properties in the area can prove frugal. With a prominent presence, one manager can oversee multiple locations, ultimately decreasing your hotel’s salary expenses and providing the financial cushion needed for greater success moving forward.
Preventing Liability Claims
Unfortunately, fewer employees on the payroll means less capacity for guest oversight, which can make your business vulnerable to increased liability claims. Among the top expense drivers in the industry, these claims could cost your hotel upwards of $100,000. In order to safeguard against this possibility, selecting third-party vendors who, like your hotel, implement strict safety measures and invest in employee training becomes vital. This is especially true for the vendors who directly interact with your customers’ private property, such as their vehicles.
3 Propark Solutions
Reimagining Management Fees
With a flexible management fee, hotel finances can be redirected to business areas that require immediate attention while revenue normalizes. Propark understands your urgent need to reduce costs now and are committed to working with you on the road to fiscal recovery.
Streamlining Managerial Position with a Large Local Presence
Propark has a large presence with over 50 existing locations in the Boston area. With that, Propark can offer the support of its existing presence to streamline managerial positions, effectively reducing G&A labor costs. This will position your company for stronger growth in 2021, as occupancy rates are expected to increase by 30.5%, as reported by STR.
Preventing Liability Claims Better Training of Employees & Implementing Technology
Propark can also provide increased physical and financial safety through on-site employees and technology. Our highly trained valets safeguard against potential costly liability claims for destruction of property by photographing existing vehicle damage upon arrival and tracking it in our system. Additionally, our Cloudpark Remote Management System provides round-the-clock service with increased safety features and a staff of concierge-quality managers available to customers at the push of a button.