The logistical challenges that affect hotels are the same as those affecting any other industry. Customers are expecting businesses to provide them with fast, friendly service, and businesses are trying to cut down on rising costs and turnover.
How can hotels do all of this and more?
Logistics management in the hotel and hospitality industry
The five elements of logistics include storage/warehousing, packing, inventory, transport, and information and control. B2B logistics is the process of getting items from Point A (storage) to Point B (the hotel) in as little time as possible. Unfortunately, a quick supply chain is costly.
At least on the surface. Since customers want to eat at a fully-stocked hotel restaurant and swim in a chlorinated pool, they’re going to be disappointed if pool items or food don’t arrive.
The right logistics management strategy can get customers what they need for a decent price. Even if this sounds impossible, you can tackle cost challenges by picking away at small problems and focusing on convenience. Your customers will pay extra for a good experience.
5 common logistical challenges in the hotel industry
You won’t be able to solve your supply chain issues if you don’t understand their inherent problems. Here are 5 hotel-specific logistical challenges to watch out for in 2022 and beyond.
1. Hiring and retaining staff
The hotel industry has a long-standing problem with attracting the right talent. In fact, The annual turnover rate is 84.90% in hospitality, 39.9% in manufacturing, and 54.5% in trade, transportation, and utilities. All of these services affect hotels, and turnover isn’t cheap.
It’s estimated that it costs 6 to 9 months of an employee’s salary to replace them, and that’s not even counting the costs of lost productivity and unhappy customers both now and in the future.
Here’s how your hotel can manage these problems:
- Hire a shipping company that takes good care of its employees.
- Offer benefits to employees that handle logistics, like better healthcare.
- Commit to ongoing training and map out a clear growth path.
- Create a culture that establishes a feeling of belonging.
- Offer flexible schedules and a healthy work-life balance.
If your staff are happy, engaged, and active, your turnover rate will plummet. Appreciation can go a long way, so be sure to thank them regularly and offer rewards for their hard work.
2. Rising guests expectations
Guests demand a lot from their hotels, from free WiFi to fast check-ins. Your customers have more options than ever before, but that can make competition fierce. If they’re unhappy, they may ask for a refund or go through the chargeback process, which eats into your profits. See how it works here
While guest expectations seem like a front-house problem, that’s far from the truth. Customers will think your service isn’t up to par if you stop offering something because stock is low.
Hotels can keep up with guest expectations by:
- Having full visibility into the shipping process.
- Planning supply chain transportation ahead of time.
- Keep needed items stored in a nearby warehouse.
The trick to logistics management is preparing for the inevitable. If you can’t contact your supply chain, you’ll still be able to act quickly and pull needed items from your warehouse immediately.
3. Inflated costs of daily consumables
Quality insurance is an essential part of logistics, especially on consumables. Hotels need to make sure food items are shipped securely without contamination, or you’d have to throw out your whole stock. Unfortunately, this problem requires more than visibility and prior planning.
Since an in-house restaurant is vital for ROI, you must keep track of guest preferences and seasonal trends to get this part right. Metrics are your friend when it comes to logistics.
Cut down on rising food costs by doing the following:
- Remove menu items that are too expensive to prepare.
- Keep a constant check on your inventory and control stock.
- Only offer seasonal/popular items once you’ve hired a trusting supplier.
- Follow your hotel trends and order food according to this data.
- Hire two shipping companies, so you can swap if the other is busy.
This challenge involves the care and patience of your hotel staff and a detail-oriented logistics team. Together, you can develop a cost-saving strategy that affects your entire infrastructure.
4. Lack of communication
Poor communication is often the main reason why costs pile up. If you’re tight-lipped, don’t write anything down, or neglect to triple-check what was said, your hotel guests will miss out. Tech can automate part of the shipment process, but it can’t replace human interaction.
Communication can’t be left to chance. It’s not wise to assume that other people can read your mind or understand what you want. Your team wants to help you; they just need guidance.
You and your staff can clear up confusion by:
- Create an ordering policy or shipment calendar.
- Email instructions directly to the head of each logistics department.
- Be honest and transparent about what you need from your logistics team.
If communication is still a problem despite your best efforts, it’s time to start investigating. Is it possible you weren’t clear enough, or is there a broken telephone effect happening somewhere?
5. The push towards more tech
Our world is vastly becoming more tech-focused, and the hotel industry has to start adopting them if they want to compete. New, innovative logistical solutions are non-negotiable, but you have to ensure your technology suits your hotel’s size, inventory, and other needs.
At the same time, your technology can’t be anti-environment. If your supply chain isn’t route optimized or fuel-efficient, there’s a high chance your customers will stay in another hotel.
Here’s how your hotel can adopt new tech safely:
- Opt for fuel-efficient brands or cars, where possible.
- Hire a courier that cares about lowering their electricity/gas usage.
- Install route optimization and package tracking in courier vehicles.
- Look into self-driving vehicles or companies that use them.
- Install a warehouse or inventory management system.
While some of these innovations aren’t cheap, route optimization, management systems, and package tracking are worth it, as they’ll help increase productivity and reduce human error.
