Hotels’ and restaurants’ main costs are raw materials and staff. As such, the most effective cost control techniques in hotels and restaurants depend on the ability to reduce the “fixed” cost component and turn it into “variable”.
In raw materials, the ability to reduce the stock by applying flexible supply techniques (e.g. just in time) minimises the capital investment required to maintain large stocks. This mainly depends on the availability of credible suppliers able/willing to supply on short notice without causing sourcing problems.
In staff, the ability to find the equilibrium between recruitment requirements and productivity is key to controlling labour costs. The ability to establish a remuneration system, correlated to productivity can relieve a huge burden off costs.