Why Hotels Overspend on Staff Even When They Seem Understaffed

High staffing costs are among the most common reasons for declining hotel profit. Yet the problem is not always the level of salaries.

In many hotels, owners believe staffing has already been reduced to the minimum. A detailed analysis often shows the opposite: some employees are overloaded, others have very little work, certain functions are duplicated, and outsourcing costs more than an in-house team.

As a result, the hotel incurs unnecessary costs every month without even noticing them.

Why Payroll Costs Keep Rising

Payroll is usually one of the largest expense items after utilities and procurement.

However, high payroll costs do not necessarily mean high salaries.

More often, the cause lies in inefficient work organisation.

For example:

• departments are staffed without considering actual workload;
• shift schedules do not reflect seasonality;
• several employees perform the same functions;
• some processes could be automated more effectively;
• outsourcing providers cost more than an in-house team.

All of this gradually reduces hotel profit.

Does Outsourcing Always Save Money?

Many hotels outsource cleaning, Housekeeping, maintenance or security in the expectation of reducing costs.

In practice, this does not always work.

Without analysing the cost per room, the volume of work performed and the contractor’s actual workload, expenditure may be higher than the cost of maintaining an in-house department.

It is therefore essential to compare the numbers rather than rely on general assumptions.

Questions the Owner Should Ask

If even one of these questions is difficult to answer immediately, an analysis is warranted.

✔ What percentage of revenue does payroll represent?

✔ What is the Labor Cost for each department?

✔ Where is an in-house team more cost-effective, and where is outsourcing preferable?

✔ Which employees are genuinely working at full capacity?

✔ Are functions duplicated between departments?

✔ Is staffing aligned with the hotel’s current occupancy and workload?

The answers to these questions reveal hidden opportunities to improve profitability.

What a Professional Analysis Covers

A comprehensive analysis assesses staff not only by headcount, but also from the perspective of business economics.

The engagement assesses:

✔ the organisational structure;

✔ staff numbers and workload;

✔ payroll and work schedules;

✔ Labor Cost by department;

✔ opportunities to improve operational efficiency;

✔ outsourcing effectiveness;

✔ additional operational efficiency opportunities.

This approach supports decisions based on data rather than assumptions.

What the Owner Receives

The analysis results in a report showing:

• where the hotel is overspending on staff;
• which departments require optimisation;
• how effectively employees are deployed;
• which processes can be improved without compromising service quality;
• where genuine opportunities to increase profit lie.

In many cases, optimisation does not require large-scale redundancies. Adjusting the organisational structure, reallocating responsibilities or revising work schedules may be sufficient.

Why Hospitality Experience Matters

Every hotel is unique. Room count, food and beverage concept, SPA facilities, seasonality, service level and property category directly affect the required staffing level.

There is therefore no universal staffing benchmark.

The analysis should be carried out by specialists who understand hospitality and can assess not only costs, but also each department’s impact on the financial result.

This is the approach used by BELGOM Hospitality experts when analysing hotel organisational structures, staffing levels and payroll. The primary objective is to identify hidden operational efficiency opportunities and provide the owner with practical recommendations that can be implemented without compromising service quality.

Conclusion

Increasing hotel profit does not always begin with increasing sales.

In many cases, a closer look at existing costs is enough.

Regular analysis of the organisational structure, payroll and outsourcing costs reveals hidden losses, improves employee productivity and supports a more effective management system.

Sometimes, organising the team correctly is precisely what saves a hotel millions of roubles every year and creates a foundation for sustainable business growth.