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Hospitality Saying No To Part-Timers,Move Aimed To Cut Running Costs As Occupancy Levels Take A Hit
By Dr arvind, Section News
In a bid to contain costs due to lower occupancies, the hospitality industry is cutting down on its temporary staff and has slowed down on new hirings. Staff and power are considered to be the two major costs that have to be borne by a hotel. As per current industry standards, in city hotels temporary staff forms 15% of the total employee force while in leisure hotels and resorts, it's nearly 40-60%. For the industry, power, food & beverages discounts and other complimentary offers costs are also on the radar for rationalisation.
WHAT NEXT? Sarovar Hotels executive director Ajay Bakaya said, "The payroll costs are the biggest costs currently for hotels and have grown by 15-20% year-on-year. Industry players are shedding a majority of their part-time workers in a bid to contain costs." Added Howarth Consultants director Vijay Thacker, "Every hotel player has cut down on its temporary staff as a reaction to the current market condition." While some industry players admit they have cut down on workforce, others say they are doing staff rationalisation. ITC Fortune Park president Suresh Kumar said, "We are paying emphasis on design and space as well as undertaking staff rationalisation. Also, we have introduced an extra level of checks to ensure we are prudent with our costs." Clickon "Full Story" For More...
HVS International's executive director Siddharth Thaker confirmed that players are focusing on outsourcing non-core processes and training their staff for multi-tasking. Power costs for hotels have increased by 10-12% and F&B costs have increased by 30-35%. This has led hospitality players like Oberoi, Leela Hotels, ITC Fortune and Bharat Hotels to cut power costs. "We are taking measures to save at least 10% on our energy bills," says the Leela Palace and Resorts VPsales & marketing Sanjoy Pasricha. Others like Sarovar Hotels have installed power saving sensors in areas suppose to be lit 24x7 to rationalise power usage. Hotel players also agree that variable costs such as employee travel, advertising and marketing--which account for 40-50% of hotel-chain cost--have also been trimmed.
Source: Economic Times, September-08-2008
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