Where Hotel Operators Should Be Looking for Savings Now
Key Takeaways
Hidden savings opportunities often exist outside of food and labor. Service contracts for areas such as laundry, elevator maintenance, landscaping, energy management, and facility services can represent significant operational expenses and may offer substantial cost-saving opportunities when strategically reviewed.
Visibility is essential to effective cost management. Centralized procurement data, contract management, and AI-powered analytics help operators identify pricing variances, spending trends, and optimization opportunities across their portfolios.
The right procurement partner delivers more than savings. Hospitality-focused procurement expertise can help organizations improve operational performance, strengthen supplier accountability, mitigate risk, and protect guest satisfaction while supporting profitability.
Hotel owners and operators continue to face mounting pressure on profitability. Food and beverage costs are expected to rise, labor expenses remain elevated, and guest expectations show no sign of slowing down. While many organizations have already addressed the most obvious cost-saving opportunities, the next wave of value creation requires a more strategic approach to procurement.
That perspective is explored in LODGING Magazine's article, "Where Hotel Operators Should Be Looking for Savings Now," featuring insights from Walt Sheffler, President of Avendra International.
The article highlights why hospitality organizations should look beyond traditional expense categories and focus on often-overlooked areas where meaningful savings and operational improvements can be achieved without compromising the guest experience.
For more than 25 years, Avendra International has helped hospitality organizations identify opportunities to improve performance through strategic sourcing, procurement technology, and deep industry expertise. By combining spending visibility with hospitality-specific guidance, organizations can make more informed decisions and protect margins in an increasingly complex operating environment.
One area drawing increased attention is service contract management.
“Some of the most meaningful savings opportunities are coming from a category that often receives less attention: service contracts.”
From elevator maintenance and laundry services to landscaping, floor care, and energy management, service contracts can account for hundreds of thousands of dollars in annual spending. Yet many agreements are renewed automatically year after year without a comprehensive review of pricing, performance expectations, or contract terms.
According to Sheffler, a strategic review of these agreements can uncover significant savings opportunities while also improving service quality, supplier accountability, operational consistency, and risk management protections. The benefits often extend far beyond pricing alone. Contract structure, service-level agreements, incentives, rebates, and performance standards can all create measurable value for hotel operators.
Visibility is another critical factor.
Many hospitality organizations manage contracts at the property level, making it difficult to identify spending patterns, inconsistencies, and opportunities across an entire portfolio. Modern procurement platforms help address this challenge by bringing together purchasing, invoicing, and contract data into a single view. AI-powered analytics can then surface trends, identify pricing discrepancies, and recommend actions that may otherwise go unnoticed.
However, data alone is not enough.
“Visibility is important, but acting on the information requires experience and expertise.”
Understanding whether pricing is competitive, evaluating supplier performance, and identifying alternative sourcing strategies requires specialized hospitality knowledge. Increasingly, hotel operators are looking for procurement partners that serve as extensions of their teams, helping translate spending insights into measurable business outcomes.
As economic pressures, inflation, and market volatility continue to challenge the hospitality industry, organizations need a clearer understanding of where money is being spent and how sourcing decisions impact operational performance. Procurement has evolved beyond simply reducing costs. Today, it plays a critical role in helping hospitality organizations operate more efficiently, manage risk, and protect profitability while maintaining exceptional guest experiences.
At Avendra International, we help hospitality organizations uncover opportunities that drive both immediate savings and long-term value, allowing hotel teams to spend less time managing supply chain complexity and more time focused on serving their guests.
WHERE HOTEL OPERATORS SHOULD BE LOOKING FOR SAVINGS NOW
FAQs
What hotel expenses should operators evaluate beyond food and labor?
Service contracts are often overlooked but can represent significant spending. Categories such as laundry services, elevator maintenance, landscaping, facility services, uniforms, and energy management may offer meaningful opportunities for savings and performance improvements.
How can procurement technology help identify savings opportunities?
Modern procurement platforms consolidate purchasing, contract, and invoice data to provide greater visibility into spending. AI-powered analytics can identify pricing variances, spending trends, and opportunities for optimization across portfolios.
Why are procurement partners becoming more valuable to hotel operators?
Procurement partners bring industry expertise, contract knowledge, supplier insights, and strategic guidance that help hospitality organizations transform data into action, improve operational performance, and protect profitability.
