Hotel Inventory Management 101: How To Do It, Actionable Tips, & More

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Hotel management is a very extensive field that varies from hotel to hotel. However, there’s one thing that remains consistent through hotels despite their size – hotel inventory. If you are new to it, you can see hotel inventory management as this unconquerable mountain.

On the other hand, hotel inventory management affects all hotel’s operations. After all, the most profitable product in any hotel is a hotel room. Without a proper management system in place, hotels have no other option but to leave it to OTAs to manage their property’s business strategy.

The result? Hotels lose revenue because they pay OTAs anywhere from 15 to 30% in commission.

What Is Hotel Inventory

The hospitality industry has evolved over the years so did the aspects of the business models and management. At the start, hotel inventory only referred to the number of rooms available for a sale or distribution.

Today, this term encompasses so much more than available rooms. It includes every resource used in a hotel on a day to day basis. That means everything ranging from rooms and items used by housekeeping such as linen and laundry to restaurant items, various equipment, services, and ancillaries.

In fact, the hotel inventory is growing year after year at a staggering 60% across the world. With more items and services on the plate, it becomes increasingly harder to optimize and manage hotel inventory profit-wise. The fact that you need to know what is available at the moment and that you also need to dynamically price your rooms and services makes hotel inventory management even more challenging.

Types of Inventory in Hotel Industry

Inventory in the hotel industry can be divided into two categories – primary and secondary hotel inventory.

hotel inventory management

Your rooms are the primary hotel inventory. Rooms are the main source of revenue, and a rented room enables you to generate revenue from other inventory items and services you have available. You need to know at all times the occupancy of your rooms and when your rooms will be available again. On top of that, you need to optimize prices to keep the rooms occupied and increase revenue for properties.

Secondary inventory is a broad category. It includes everything ranging from gift shops, restaurants, and room supplies to ancillaries. If you stock up on items your guests don’t use, you’ll lose money. On the other hand, if you don’t have items or offer services your guests need, you will fail to generate more revenue and disrupt your guests’ experience.

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Step by Step Process on How To Do It

Every hotel and inventory are unique. However, the same hotel inventory management method can be applied across all hotels. The scope of work depends on the size of the hotel, the size and how diverse the inventory is, and the occupancy rates.

Collect Data on Your Current Hotel Inventory

The first step is to collect the data on your current hotel inventory. You will need to catalog all rooms and every secondary inventory item available at your hotel. That includes everything ranging from food and drink to linen and cleaning products. The goal is to end up with the ultimate list of your hotel inventory so that you can streamline your next steps.

Cross-reference Your Inventory With Occupancy Rates

Primary hotel inventory management requires you to cross-reference your entire room offer with the room occupancy rates. To manage means to utilize your resources so that they generate more revenue. Look for rooms that are rarely occupied. These are usually deluxe suits that you can offer as affordable upgrades. The information will also help you optimize your distribution network.

Assess the Purchasing Behavior of Your Guests

When it comes to secondary hotel inventory, to efficiently manage it, you need to take a closer look at the purchasing behavior of your guests. Do you have items and services that you rarely manage to sell? Are some of your items constantly below safe stock level? You will find answers to these questions only if you try to learn what your guests want and don’t want.

Identify Patterns

When you collect the data, you will be able to identify patterns. Patterns will help you stay on top of your management efforts. For instance, you will know when to expect occupancy rates to drop or spike and which items you need to regularly re-stock.

Use Data to Optimize Hotel Inventory Management

Finally, with all this data at your disposal, you’ll be able to make informed decisions. The insights will enable you to optimize hotel inventory, maximize revenue, and make your guests happy.

Hotel Inventory Template

Since you need all the help you can get to take your hotel inventory management game to the next level, we’ve done some research and found the following hotel inventory templates you can use for free.

Stock Inventory Template – a comprehensive stock inventory template. Use it to create a complete list of items you keep in stock, reduce excess inventory, locate items in storage, and find out when you need to re-stock.

Linen Inventory Template – use this template to effectively manage your linen inventory and track the movement of linens between laundry and housekeeping.

Food Inventory Template – stay on top of your food stock. If you have a restaurant in your hotel, this template will help you organize and optimize your inventory based on categories (meat, vegetables, food, desserts).

Equipment Inventory Template – this template allows you to track the location, condition, and value of your hotel equipment. You will be able to track various metrics, including depreciation and operating costs.

Tips To Do Hotel Inventory

Here are some additional tips for doing hotel inventory.

Estimate the Cost of Your Inventory

Take into account your ordering, shortage, and carrying costs to optimize your entire merchandising and stocking operation. You will be able to generate more revenue and prevent losing revenue due to running out of items.

User Relevant Software

Doing everything manually is daunting. After all, why would you do it when software can help you completely automate it. The latest property management system tool can help you track your entire hotel inventory, manage it on the go, and get valuable reports and insights.

Pair it with solutions such as UpStay, and you’ll be able to optimize your inventory according to market demand, increase ADR, and sell more premium rooms and services.

Always Use Data to Support Your Decisions

Don’t base your inventory management decisions on your experience or hunch. Use the data from your spreadsheets and software tools to support your decisions, such as item re-stocking and adding/removing a distribution channel.

Hotel inventory management is a complex topic. The ultimate goal is to optimize the inventory with your business goals and guests’ needs and wants in mind. Given that hotel inventory management is a very dynamic process, spreadsheets and manual work can only get you so far. Leveraging cutting-edge software tools definitely yields better results, both in the short and long run.

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Graduated from Standford University, Arielle has over 5 years of experience in the Hospitality industry. She holds an MBA in business administration from the IDC Herzliya, Israel. She currently works as Account Manager at UpStay, building and maintaining strong, long-lasting customer relationships. She is deeply passionate about helping hoteliers unlock significant new revenue streams from unsold premium inventory.


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