The Front Desk at a Hotel Can Make You Money

The most considerable expense a hotel incurs is labor. The employees who are the engine of a hotel operation may be the most expensive, but they are also the most integral to its success. Without them, we have no clean rooms, no one to check in guests, and no one to fix toilets.

Hotel Guest Checking In

Guest service representatives are an indispensable part of the hotel's operation. The guest service representatives make up what is called the front of house… or the guest-facing department of the hotel. Guest service representatives are the individuals who greet you at the front desk and assist you with checking in to a hotel. To define their role in a blanket statement: a guest service representative's job is to create a welcoming and hospitable environment for guests. From providing dinner recommendations to helping guests solve problems, guest service representatives must make guests feel like royalty.

At AARO Hospitality, our philosophy is to make profits through exceptional guest service. We often tell our team that we have three pillars: to ensure guests have an unforgettable stay, to increase revenue, and to reduce expenses.

With this in mind, how can we ensure that guests experience an incredible stay at our hotel without breaking the bank?

To preface, the amount of money spent is not directly correlated with guest experience. The notion that spending money carelessly will yield results is utterly absurd. However, being cheap is not the answer either. You can't expect a hotel to operate well without enough staff. There is a balance between having a skeleton crew that cannot achieve ultimate guest satisfaction for recurring business and a bloated crew that does not enhance guest experience.

Let me explain how you can find this balance and why labor is so essential, both as an investor and an operator, specifically for guest service representatives.

Labor costs are critical to ensuring your hotel is profitable and running efficiently. For investors, this isn't just about payroll—it's about managing operational expenses in a way that directly impacts the bottom line and thus their return on investment.

For operators, it's about creating a culture that helps the team grow and improve within the industry or their personal lives to accomplish the overall goal given to them: increase profit through extraordinary guest service. Suppose you have a team that is aligned by their interests, the pursuit of professional growth, or increased earnings. In that case, you have a hotel staff that is fully committed to increasing profitability, and part of that is providing exceptional guest experiences.

To give a guest a truly terrific experience, you need someone working every hour of the day. Guests may check in at 11 PM after a long road trip or call the front desk at 3 AM for an emergency. Having a guest service representative available and ready to assist guests with all their needs at all times is a prerequisite. But does that mean you have multiple people working 8-hour shifts each?

Probably not. Between 4 PM and 8 PM, most hotels experience their peak check-in times. Having multiple guest service representatives or front desk members overlap during these hours will enhance the guest experience. As a general rule, we schedule one guest service representative for every 50-60 check-ins during peak hours. However, during the graveyard shift, when most guests are asleep, there is no reason to have more guest service representatives; it would be a waste of resources.

Every hotel is different, but the principle remains the same: have enough guest service representatives to provide an elevated guest experience, without overstaffing.

Currently, the biggest hotel we manage is a 133-room Holiday Inn. On an average week, we forecast 28 total hours a day - 24 hours plus an extra 4 to help during rush hour. If we expect more or less occupancy, we adjust accordingly.

Unfortunately, this is not a copy-and-paste method, as every hotel has different requirements for success. For instance, we allocate fewer hours at our smaller hotel, while larger properties probably require more budgeted hours.

Proper forecasting will ensure that you are adequately covered and have a system in place for elevated guest satisfaction at costs that are predictable and realistic. However, once you have established the baseline for the hotel, several strategies can help you reduce your guest service representative hour requirements while maintaining exceptional guest service.

Leveraging Leadership at the Front Desk for Cost Savings

Do you have an Assistant General Manager (AGM)? If you're managing a smaller hotel, your AGM can work 3 to 4 shifts per week at the front desk.

The AGM role is dual-purpose, filling in for shifts when needed while taking on broader responsibilities across the hotel. This not only reduces payroll expenses but also ensures that operations run smoothly, as hotel management now has a direct understanding of the hotel's service delivery.

If your AGM works 24 hours per week at the front desk (3 shifts), that's 48 hours per bi-weekly payroll cycle that can be subtracted from the total hours needed for front desk coverage. Assuming the average guest service representative makes $14.50, that saves you $18,096

At a 10x EBITDA (NOI) Multiple, this represents $180,960 of value added.

There is a caveat with this. You want to make sure that the highest and best use of the AGM is at the front desk. There is always an opportunity cost to a decision like this that may outweigh the $18,096. For example, if the AGM could instead spend time finding more business or creating systems and processes that reduce other costs, then it may not be a good use of resources to have the AGM at the front desk.

Adapting to Seasonality

Another strategy to reduce labor costs is to adjust front desk hours according to seasonality. From November to February, many hotels experience slower periods. During these times, you can reduce front desk staffing levels to align with lower occupancy rates.

This flexibility gives hotel owners and investors an edge. Unlike fixed costs, such as debt service or property taxes, labor is a variable expense that can be managed based on demand. This ability to control costs during slower months helps protect cash flow and ensures steady returns, even during off-peak seasons.

Implementing Technology At Your Hotel

With the advances of the internet, industries of all sorts have and are continuing to revolutionize the way they do business. Hotels are no different. Not only does the advent of self-check-in tools help alleviate the load on guest service representatives, but other technologies can also help reclaim time, allowing managers and other team members to focus more on the guest-facing aspects of the business.

Tools that automate bookkeeping, ordering, creating reports, pricing, and other back-office tasks can now be done more quickly with technology. Utilizing these, managers can spend more time at the front desk. More time at the front desk means fewer hours for guest service representatives and higher guest satisfaction.

Why This Matters to Investors

Every dollar saved on labor costs is a dollar added to the bottom line. For hotel investors, small operational efficiencies like these can compound into significant financial returns.

Consider the approximately $18,000 we could have saved if the AGM had worked at the front desk.

That is a $180,000 increase in property value (at a 10% CAP rate).

Side note, I think a better use of an AGM's time at a hotel where guest service representatives are valuable team members is probably in tasking the AGM with creating more revenue, as they can likely generate more than the $18,000 saved. This is on a case-by-case scenario, and having the AGM enhance the front desk while saving money and training the guest service representative to be better is not a bad idea in the meantime.

These incremental adjustments—maximizing efficiency without compromising guest satisfaction—create long-term value for investors.

For investors, managing labor costs isn't just an operational detail—it's a strategic advantage. Properly staffing the front desk ensures:

• Higher guest satisfaction: Positive reviews and word-of-mouth drive more bookings.

• Operational efficiency: Less waste means more profit.

• Stronger financial performance: Lower expenses lead to higher NOI and, ultimately, higher property valuations.

In a competitive market, these small efficiencies can make a big difference. They can mean the difference between an underperforming property and a hotel that delivers consistent double-digit returns.

Each hotel will vary in the number of staff members needed at the front desk. A hotel in a downtown area may require 3–4 staff members during peak hours, while a suburban property may only need 2–3. The key is to stay flexible and adapt to demand.

As an investor, understanding how front-of-house hours impact your returns is crucial. By keeping a strong pulse on staffing needs and prioritizing guest satisfaction, you're setting your property up for success.

Strategic labor management doesn't just save money—it drives profitability. And in hotel investing, every dollar saved on operations is a dollar earned in returns.