Hotels’ No.1 Struggle is to Increase Cost Efficiency

With increasing competition in the hotel industry, hoteliers are trying to find ways to improve their cost-efficiency. However, Malaysian hotels operate at a 66% efficiency, which is much lower compared to other Asian countries, such as Taiwan (80% efficiency). If you are a small hotel owner, you are probably trying to figure out the best ways to reduce operational cost, while offering the best value to your hotel guests. We know this is no easy task. But if you are curious about this whole “technology automation” stuff or you are just unsure whether it can help your business reduce cost, we’re here to help you!

Here are 3 ways technology can help hotels save cost

1.Check-in & Check-out Mobile Apps

One way hotels can reduce costs is by automating the check-in/check-out process. This quick fix solution, like the one offered by HotelX, allows guests to use their smartphones to check-in or out at their own convenience. From the hotel perspective, this automation will help reduce queues and foot traffic at the front desk, allowing staff to focus on other tasks, like spending more time on guests’ more urgent needs. While hotel guests experience a seamless check-in and out experience, hotels get to reduce labour costs, as fewer staff members will be needed to accomplish the same number of tasks.

2.Cloud-based Hotel Management System

Did you know that poor and outdated processes are the main cause of increased operational costs among hotels? While there is no denying that technology will play a big role in transforming the hotel industry, Servion predicts that by 2025, more than 95% of customer interactions will be through artificial intelligence, many small hotels are still worried that this process will cost them a lot of money. But that’s not necessarily true. Nowadays, there are plenty of software providers who are willing to help you out with minimal or no set-up cost! A cloud-based hotel management platform, such as HotelX, which is specially tailored to fit all the needs of managing small hotels into a single platform, you can save costs and boost your efficiency.

3.Integrated Digital Payments Platform

Seamless automation of payments is a great way for boosting up your guests experience (Mews 2017). There are plenty of digital platforms on the market which allow you to choose from a wide range of modern cashless payments, such as mobile payments, digital payments, QR pay which will help you increase your customer satisfaction.

Sounds great, doesn’t it? But can switching to online payments REALLY help u save cost?

Absolutely! Firstly, time is money. If you integrate your payment solutions with your hotel management system you can opt for a fully automated payment which saves you time, and money. You will also eliminate the need for hiring extra staff to do manual filing, stapling of receipts, scanning customer credit cards or hiring an extra staff to go through difficult to read financial reports. Switching to cashless payments can minimize human errors (such as loss from swiping invalid cards) and reduces cyber security risk (ie. stolen credit card information) too, which in return saves you money. Not to mention, due to the wide-spread internet access, Malaysia is moving towards a cashless society (NST 2019). As your customers move towards mobile app payments like Touch’n’Go, Boost, or WeChat Pay you won’t want to miss out on this opportunity.


If you want to stay competitive in the hotel industry, it’s crucial to work towards improving your cost efficiency. Ultimately, the best way to get ahead of your competition is to be innovative and use technology to your advantage. For small hotels, automation benefits are trifold: increased efficiency, reduced costs and improved customer satisfaction. Now that you know three ways in which technology can help you reduce costs, you should consider switching to an automated management platform ASAP.

Resources and further reading

Mews (2017) Why moving from offline to online payment will future proof your hotel [Online] Available from <> [Accessed 10 Sep 2019]

NST (2019) LGE: Malaysia well on its way to become a cashless society [Online] Available from <> [Accessed 10 Sep 2019]

Hotel Effectiveness (2016) 8 Guaranteed Ways To Reduce Your Hotel’s Largest Operating Costs. [Online] Available from <> [Accessed 2 Sep 2019]

Social Tables (2019) Wednesday Wisdom: 7 Simple Ways to Reduce Hotel Operating Costs While Sustaining Customer Service. [Online] Available from <> [Accessed 2 Sep 2019]

Poldrugovac (2016) Efficiency in the hotel industry: an empirical examination of the most influential factors, Economic Research-Ekonomska Istraživanja, 29:1, 583-597, DOI: 10.1080/1331677X.2016.1177464

Chathoth, Prakash. (2007). The impact of information technology on hotel operations, service management and transaction costs: A conceptual framework for full-service hotel firms. International Journal of Hospitality Management. 26. 395-408. 10.1016/j.ijhm.2006.03.004. (2017) AI Will Power 95% Of Customer Interactions By 2025. [Online] Available from <> [Accessed 3 Sep 2019]