Kevin Smith Transportation Group Identifies Savings for Local Hotels
Kevin Smith Transportation Group (KSTG) continues to be at the forefront of education within the transportation industry, recently publishing a highly cited white paper on hotels in the Greater Philadelphia area reducing costs while increasing profits through the growing trend of outsourcing shuttle services for their guests. In fact, according to the white paper, more than 200 school districts in Pennsylvania have already moved to outsourced non-educational transportation needs leveraging the same benefits that the hotel industry have begun to recognize are available to them.
EXECUTIVE SUMMARY
The purpose of this white paper is to analyze the costs for a hotel to own and run its own hotel shuttle and to determine if outsourcing is a better alternative. Using data from different credible sources, we will examine the various costs of purchasing and operating a hotel shuttle, and establish whether this is a good option from a fiscal and operational perspective.
In today’s world, reducing costs has become a fundamental hurdle to businesses and requires careful handling in order to achieve positive returns while still stimulating growth. Failure to regulate costs can be catastrophic for any business irrespective of its industry. This paper, therefore, provides one of the best ways to save time and money, not only for hotels but for other businesses as well.
After thorough research and analysis, we established that outsourcing has become a growing trend, both as a way to help reduce these costs, as well as a means to increase bottom line profits. In the hotel industry, transportation is not one of the core operations of their business profile; hence it’s beneficial to outsource to transport companies in order to focus on their key services such as guest accommodation, event hosting, and catering.
INTRODUCTION
Many hotels consider shuttle facilities a great asset to their operations. In fact, many customers have made the availability of shuttle services a key factor when deciding on which hotel to book. This is especially common for people traveling to foreign countries or new cities; hotels provide courtesy transportation for their customers to and from an airport or other local destinations as a convenience and as a means to support their primary business, and guests choose that hotel for those reasons.
Despite their benefits, shuttle services have significant financial burdens on the hotel, which forces the hotel to choose between running an in-house shuttle or outsourcing to a transportation company. The costs of running a hotel shuttle are enormous and continue to increase with time as the bus or van ages. While some proponents of having a hotel shuttle argue that owning a shuttle bus helps a hotel to differentiate its services from its competitors, and others focus on the convenience, ultimately all of these proponents fail to factor the most critical element: how much it costs.
This paper is an in-depth examination of the cost of owning and running a hotel shuttle and the various challenges that come with it. It will also propose a cheaper and efficient alternative, which is outsourcing.
BACKGROUND
Hotels are striving to provide courtesy shuttle services to entice potential customers and make themselves stand out from the competition. Unfortunately, this service comes with extra costs to the hotel, and the costs are even higher when the bus or van belongs to the hotel. Spending money on the necessities such as food, drinks, and accommodation is important, but spending a significant amount of money on items that are not among a company’s core elemental services is not wise. Transportation is not a core service in the hotel industry, and although shuttle services are vital to many customers, the cost is not indispensable to hotels. Therefore, before incurring substantial costs regarding transportation, they need to reconsider their approach since the offering can affect the profitability and performance of the hotel.
Costs such as purchase, fuel, insurance, driver’s salary, parking, maintenance, and wear and tear are just too heavy for a hotel, and there is no point of incurring such costs if there is a better and cheaper alternative. Let’s break it down.
The full white paper can be read at https://kevinsmithgroup.com/hotels-driving-bottom-line-profits-outsourcing-hotel-shuttle-services/
You can also connect with KSTG on LinkedIn where we post daily tips on corporate transportation to help educate the thousands of buyers who purchase those services every month.
