HOW ASSET TRACKING IMPROVES YOUR HOTEL’S REVENUE MANAGEMENT STRATEGYApril 2017

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How Asset Tracking Improves Your Hotel’s Revenue Management Strategy

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When most people think of hotel assets, they think of products like sheets, bathrobes, mini bar drinks and

snacks, and even those Bibles found in every hotel room’s nightstand drawers. But as a hospitality industry

employee, you know there are far more assets which hotels are responsible for beyond these simple room

items.

Hotel assets cover everything from items in guest rooms, to the paintings lining the hallways of each floor,

to the products for sale in the gift shop, to even more areas of the hotel. For example, hotels which run their

own continental breakfast need to make sure they have enough food and serving supplies to feed guests

each morning. Hotels which also run their own restaurants must ensure that kitchen is fully stocked to meet

demand. Additionally, any establishment that might offer guest services like a business center, spa, gym,

pool/sauna, etc. needs to track every single asset these separate areas require to function.

What happens, though, when a hotel isn’t proactively monitoring all the assets needed to keep its

establishment running smoothly? In the case of a hotel shop, for example, if inventory isn’t up-to-date,

guests won’t be able to purchase those items until they’re restocked and put back on display. Likewise, if the

management team doesn’t routinely conduct audits of items like towels and bathrobes, it won’t be able to

know if the hotel is short on these items due to theft or misplacement.

These scenarios are all too common, and result in not just the loss of sales for the hotel as a whole, but they

also decrease consumer satisfaction with the hotel’s professionalism and customer service. While tracking

hotel assets is undoubtedly a massive undertaking, the benefits of doing so are well worth the effort and

help hospitality establishments avoid problems like those outlined above.

In fact, hotels which properly track and manage their assets have a far greater chance of stabilizing,

correcting, and even improving their revenue than those who don’t. When hotels can use asset management

to deter pitfalls like theft and non-compliance, they’re more likely to avoid unnecessary financial losses and

grow their income in the long run.

The rest of this white paper will explore six ways asset tracking can increase your hotel’s revenue

management strategy.

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Improved Loss Prevention/Theft DeterrenceAs noted in the introduction, hotels have thousands of assets to track on a daily basis, including every item

in guest rooms to highly valuable pieces such as art and expensive equipment. This means hotels which don’t

track their assets run a huge risk of losing not just these items, but also thousands of dollars a year.

Many news outlets quote the American Hotel and Lodging Association, which reportedly discovered in 2000

that U.S. hotels alone lose $100 million a year to theft, presumably from both guests and employees. A more

recent 2012 survey from travel agency site lastminute.com estimated one in ten guests will steal an item,

costing an average hotel around £4000 per year (roughly $5100 USD) and five-star accommodations £15,000

per year (nearly $20,000). Washington D.C.’s Mayflower Hotel factors such theft into its annual operating

budget to the tune of $300,000 per year. That sum was only from 2007, as well, so it’s likely the Mayflower’s

theft replacement bill has increased.

Unfortunately, in the hospitality industry it’s assumed guests can and will steal any item; a 2004 study from

Orbitz, for example, found 18% of around 2700 respondents weren’t above stealing towels, 14% admitted to

taking ashtrays, and around 2% took bathrobes. And while some hotels may not count consumables like soap

and shampoo as stolen (since they’d need to be replaced anyway), the cost of these other items can quickly

add up.

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The situation gets even worse when you consider the market value of expensive items in hotels such as art

and paintings, which are prime targets for pilfering. For example, lastminute.com discovered one guest stole

an Andy Warhol painting worth $300,000 from Hong Kong’s W Hotel. Some guests are even prone to stealing

larger pieces like furniture; one hotel in Istanbul claimed one of its rooms was left with nothing but the bed,

desk, and television. Lastminute.com’s survey noted other unusual but potentially expensive items guests

have stolen, which include chandeliers, carpets, sinks, sofas, cutlery, mattresses, and even a grand piano.

Obviously, when guests steal assets from a hotel, the establishment not only loses money, but also must

deal with the shortage of that item and the ensuing impact it will have on insurance, customer trust, and

everyday operations. If hotels adamantly tracked their assets, however, there would be no need to factor

such large losses into a yearly operating budget. In reality, proactive asset management will help deter theft,

because it’s easier to determine who stole assets when they are properly recorded. As such, asset tracking

also helps minimize the financial losses and insurance issues which come along with theft.

Fewer Misplaced ItemsSimilar to theft, misplaced items can be a major drain on a hotel’s finances and productivity. A well-run hotel

should be tracking which employee last used an asset such as a vacuum or laptop, but sometimes in the

midst of a chaotic day, even the most attentive employee can have a lapse in memory.

While misplaced items may not cost a hotel as much per year as stolen towels or art, for example, the

financial impact of missing items can become a problem if the items can’t be found or if their going missing

is a routine occurrence. In the case of a misplaced laptop, for example, you and your staff might search for

hours before finding the computer, or not finding it at all due to another employee moving it or a guest

stealing it. The cost to replace even the most basic, functioning laptop will short you at least $500.

Searching for a misplaced asset is also a drain on your hotel staff’s productivity. Instead of performing

the duties of their jobs, they have to divert some of their time and energy to looking for the missing

item. A reduction in productivity also means a reduction in revenue; one study from Brother International

Corporation found on average 76 hours per employee per year are wasted as they try to find misplaced

items or information. Overall, the study determined $177 billion is lost annually across all industries when

disorganization means assets are misplaced.

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Implementing a solid asset tracking solution, however, helps your hotel and its employees avoid unnecessary

issues surrounding misplaced items. A hotel which thoroughly keeps track of who uses its assets is more

likely to figure out where an item is by talking to the person who last touched or saw that particular item.

Essentially, assets are less likely to stay permanently missing, and will also not need to be replaced, when

hotels practice up-to-date, comprehensive asset management.

Overall, asset tracking aids your hotel by reducing the time looking for misplaced items, which increases

your hotel’s productivity and efficiency. Tracking assets also saves you money as you don’t need to buy

replacement items, and you also gain back the paid hours your employees would have otherwise spent

searching for the misplaced items.

Better Maintenance ComplianceHotels have thousands of assets which must be properly maintained in order for the establishment to

function both efficiently and safely. For example, many hotels have shuttles which run to and from local

airports or points of interest; these must be properly maintained and fueled to keep passengers safe and the

shuttles on schedule. A robust asset management and tracking system will help you and your staff not only

track which items will need to be repaired, but can also improve your preventative maintenance strategy so

you know when an update or quick fix is almost due.

In the long run, this system increases your revenue as you’re not having to scramble last-minute to pay for

costly maintenance you weren’t expecting. Improving your maintenance compliance also avoids any ensuing

fees you might incur from non-compliance fines. Say your hotel undergoes an impromptu audit and it’s

discovered many of your smoke detectors aren’t working or have dead batteries; this scenario is grounds for

hefty fines which you could otherwise avoid by keeping a rigorous preventative maintenance schedule in

your asset tracking system.

Another way an asset tracking program can help hotels improve internal compliance is by enforcing

an automated procurement system. Many hotels have wholesale suppliers who offer discounts or

predetermined pricing, which helps the establishments plan how much they’ll need to pay on a regular basis.

For example, when planning for how many bath towels you’ll need in a certain year or quarter, your asset

tracking platform can not only help you track how long these linens will last, but also remind you when it’s

time to re-order, making it easier for you to plan your budget and save money.

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“Hotels which properly track and manage their assets have a far greater chance of stabilizing, correcting, and even improving their revenue than those who don’t.

This automated procurement system can also help prevent employees from purchasing outside of an

authorized vendor list. If you routinely conduct audits of your assets and only buy from select manufacturers

or vendors, you will know if a purchase was made outside of these guidelines. When you adamantly track

assets bought from select vendors, you won’t need to deal with surprise bills for non-approved purchases.

Overall, being able to meet compliances means you’re less likely to pay for unexpected maintenance

concerns, avoid high non-compliance fines, and keep purchasing decisions under control. All of these

benefits increase your chances of stabilizing or even upping your annual revenue.

Properly-Stocked Hotel ShopsWhile hotel shops might seem like a thing of the past, these establishments can actually contribute some

money to a hotel’s overall operating revenue if proper attention is paid to them. Consider this 2007 story

from Lee Ann Sauter, founder of hotel retail company Seaside Luxe: after staying at the Hualalai Four

Seasons hotel in Hawaii, she bet the CEO she could open up a better hotel shop and within a month of its

opening, the resort’s retail revenue had quintupled.

A powerful asset tracking system will only aid the growth and revenue of a well-run hotel shop. As noted

in the introduction, it’s much harder to sell products and maintain customer satisfaction when a hotel shop

simply doesn’t have items in stock or on hand when guests ask for them. Essentially, when it’s easier to

maintain a hotel shop’s inventory, it’s more likely the business will be profitable and contribute to a hotel’s

overall revenue.

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Omni Dallas Hotel is a good example of a hospitality establishment maintaining (and earning from) a well-

stocked, well-functioning hotel shop. From January 1 to October 31 in 2011, the 1001-room hotel pulled in

$56.72 million from food, drinks, and room rentals, with a total operating revenue of $61.4 million. The $4.68

million difference in revenue specifically came from the hotel shop and spa. This figure would undoubtedly

be lower if Omni wasn’t actively tracking its inventory to make sure the store was stocked with the right

amount of product.

Hotel-operated shops are most likely to be profitable and useful for resorts, where retail revenue per room

averages to $2088 or 1.9% of the resort’s total revenue. Of course, depending on your hotel’s specific

needs, operating your own shop may not contribute much to your annual operating revenue, or provide any

perceived benefit to guest satisfaction. However, if a hotel shop is a part of your business operations, using

an asset tracking system to maintain and update inventory is the best way to ensure the shop runs efficiently

and contributes as much profit to your overall revenue as possible.

Less Taxable IncomeIn any industry, asset depreciation is simply part of the cost of doing business. In the hospitality industry,

however, assets depreciate more rapidly than they might at other companies. Sheets which are constantly

slept on only last so long, for example, and carpets which routinely endure the dirtiness and scuffling of

guests’ shoes will lose value more quickly than they might at a regular law office or boutique store.

When hotel assets depr eciate, the establishment must count this reduction in value towards its operating

budget in addition to the cost of replacing the assets altogether. Fortunately, asset depreciation is a very

good thing for hotels looking to increase their revenue, as it has significant, beneficial tax ramifications.

Since depreciation is considered a business expense, it reduces a hotel’s overall taxable income, which means

that hotel may have fewer taxes to pay each year. Therefore, tracking the depreciation of assets is in the best

interests of hotels hoping to improve their revenue management practices.

Additionally, asset depreciation can help your hotel boost revenue by properly balancing financial reports

and statements. A hotel’s book depreciation expense is the amount recorded on its financial statement,

while tax depreciation is recorded on the hotel’s income tax return. Keeping track of both of these amounts

of depreciation is both an excellent and legal strategy to reduce the amount of taxes your hotel might owe

each year. While this does require more bookkeeping and tracking of your assets, with the right system in

place, it shouldn’t be a hard task with an easy-to-use, intuitive asset tracking platform.

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Another way depreciation can help hotels increase cash flow is through a cost segregation study. This

process helps to determine which property assets are personal (which can include elements like exterior

land improvements and non-structural elements) or real, according to the federal tax code. Cost segregation

determines and reclassifies personal property assets to shorten the tax life of the assets and decrease tax

liability, which results in both increased depreciation and more readily-available income. According to an

article in Hotel Executive, one hotel on the East Coast conducted just such a study, reclassified 29% of its

assets, and managed to save $700,000 in taxes over the course of five years.

Increased Customer SatisfactionRepeat customers have always been the best and steadiest source of revenue for all types of businesses,

including hotels. While an influx of new and one-off visitors can boost profits temporarily, regulars come

in and spend money at your establishment time and time again. On average, a loyal customer is worth 10x

as much as their first stay with you, so it’s vital to treat each and every one of your guests as if they were

potential repeat customers, especially when 95% of travelers read reviews of hotels online before they

book.

One of the easiest ways to keep customers coming back is by providing them an enjoyable -- even memorable

-- experience. The more satisfied a guest is with their stay at your hotel, the more likely they are to choose

your establishment over a competitor for future accommodation needs. While you can do quite a lot in

your hotel to provide your guests with the best experience possible (such as offering loyalty programs and

improving customer service), you can also use asset tracking to increase guest satisfaction and convince

them your hotel is worth staying at again.

Through asset tracking, your hotel can ensure it stays up-to-date on all internal and guest-facing operations.

When your hotel runs smoothly, guests are more likely to have a positive view of your establishment.

Additionally, when assets are properly tracked and readily available for customers when needed (such as

new towels or toiletries), guests will not have to wait for you to find a replacement, which also increases

their overall satisfaction and the likelihood of their return.

Without dedicated asset tracking, your hotel will run into issues on a daily basis which could affect the

way a guest perceives your professionalism. As noted in a point above, ensuring items like A/C units and

heaters are in working order in a guest’s room is best accomplished with an asset tracking system which

helps you stay on top of your maintenance needs. When tasks like this are forgotten or overlooked due to

disorganization, a guest is more likely to not only leave one of those nasty online reviews, but also never

return to your establishment again.

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Asset Panda’s Hotel Asset Tracking Solution As an hotelier, you have a lot on your mind every single time you come into work. Not only are you concerned

with keeping your establishment running smoothly, but you’re also looking to turn a profit while making

sure guests are comfortable and enjoying their time at your hotel. Any problem, no matter how minor (like

a shortage of printer paper in the business center), can interrupt operations, impact guest satisfaction, and

potentially affect your overall revenue.

To ensure your revenue management strategy is the best it can be, and your hotel is running as efficiently

as possible, consider using Asset Panda’s hotel asset tracking solution. Our cloud-based software is fully

customizable to meet the asset needs of any hotel, and since it’s available both in web and mobile format, all

of your employees can access information wherever they are. Asset Panda’s mobile app includes a barcode

scanner to help you better track and organize your hotel’s assets. Our platform is also capable of integrating

with other programs, apps, or software your hotel might already be using, including services such as G Suite,

ZenDesk, Microsoft Active Directory, and MailChimp.

Some hotels currently using Asset Panda include Coast Hotels, Conrad Hotels, and New Orleans’

Pontchartrain Hotel. Sandals Resorts also uses Asset Panda; here’s how it works for them:

n Tracks fixed assets: Sandals tracks items such as room furniture, televisions, dining furniture, and

more.

n Tracks IT inventory: the high-profile resort chain also uses Asset Panda to track laptops, mobile

phones, desktops, and other computer-related equipment across ten locations.

n Provides complete management of hotels, facilities, and all related assets: Sandals uses Asset Panda

to make purchase orders, handle work orders, track maintenance schedules, assign tasks to specific

users, and more.

n Functions as an enterprise service desk: Users can request service or maintenance support for any

asset in the system using our free mobile app to scan the barcode or QR code attached to the asset.

Sandals’ support team is alerted to new open tickets via an automated email or in-app notification.

Then, they can schedule repairs, add notes, photos, and documents to authenticate steps taken. Once

the repair or support action is complete, the technician can close the ticket. Since Asset Panda keeps a

record of every action performed on any given asset, its history is always accessible.

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Hospitality and food industry company BLD Brands, LLC also uses Asset Panda with great results; within just

two months, the company immediately saw an impact on its bottom line, and its restaurants reported no

asset losses since implementing Asset Panda’s tagging feature. BLD’s Director of Loss Prevention Michael

Loox notes the benefits of Asset Panda’s software, specifically in relation to areas which also affect hotels

(like deterring theft and tracking valuables):

“In our business, any item that helps our restaurants generate revenue is considered an asset… and in the

restaurant/hospitality industry, there are a lot of assets to keep track of. We realized that we needed an

immediate solution to better track our valuable assets, and Asset Panda provided us a base platform to

get started, and in less than two weeks.

We looked to Asset Panda to help us develop a program that could identify, tag, track and maintain an

inventory of high-value items among our restaurants – specifically for pieces like vintage metal signs,

antiques, art, fixtures and woodwork décor inside our restaurants. It was very important that Asset Panda

could record the location and value of each individual asset for security and insurance purposes. It was

also our hope that by implementing Asset Panda, it would aid in curbing losses from internal and external

theft of these assets.

After using Asset Panda for only 2 months, I am pleased to say that we have seen an immediate result of

its impact on our bottom line. Our restaurants have reported no asset losses since tagging began.

If you are looking for an efficient and robust asset tagging solution, which is also cost effective and

demonstrably easy to use, Asset Panda is the program for you. Asset Panda provides its users with a wide

choice of tags and designs that work the way that you do. The only limits on the program are the ones

you do not explore.”

If you’d like to learn more about what Asset Panda can do to help improve your hotel’s revenue management strategy, sign up for a free, 14-day trial, or give us a call at 855-898-6058.

© 2017 Copyright Asset Panda

About Asset Panda

Asset Panda, the most powerful, yet simple to use free asset tracking software in the world, enables clients

to track their IT assets exactly how they want, and from the mobile devices they already carry. The platform

may be accessed either online or via free mobile iOS and Android apps that sync with the cloud. The apps

include a mobile barcode scanner, so there’s no need to purchase a separate handheld barcode scanner.

Users can add voice notes, videos, documents or photos to the asset’s information. The tool allows users to

view check-in/check-out status, GPS location, lease/purchase information, complete maintenance history,

insurance information, and the depreciation and in ation calculations your accounting and compliance teams

require. Companies of every industry sector and size – including some of the world’s biggest brands – have

chosen Asset Panda to help them manage millions of dollars’ worth of vital assets.

Schedule a demo: assetpanda.youcanbook.me

Tel: (855) 898-6058

Email Us: info@assetpanda.com

Headquarter Office: 3001 Dallas Parkway,

Suite 580, Frisco, Texas 75034

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