A professional project management pay less than half from accommodation compared to mediocre project management. Incompetent planning on accommodation can lead to double the costs and cause moral decadence among the workforce.
’’A business which controls annual costs well can improve its profitability and competitiveness.’’
Reasonable accommodation agreements positively impact your ability to provide competitive offers as well as improve your profitability. Our accommodation experts garnered a guide to bargaining on accommodation with 16 years worth of experience in corporate housing. After reading this guide you’ll be able to manage the accommodation costs and improve project efficiency. The guide will provide 5 ways to save on accommodation and answer the following questions:
- How can accommodation agreements make a project more profitable?
- How to decrease annual accommodation costs?
- How do collective bargaining agreements impact accommodation selection?
- Should I choose affordable, fixed-price accommodation or flexible but expensive accommodation?
- Why track accommodation expenses?
Corporate accommodation costs and management of the costs are divided in two sections:
- Project costs refer to accommodation costs which are incurred during the implementation of a fixed-term project. Project costs can be difficult to forecast due to the impact and scale of project delays. A business which controls accommodation costs well can improve the profitability of a single project.
- Annual Costs include the total accommodation costs incurred by all company employees. A business which controls total annual costs can improve its profitability and competitiveness. When accommodation is provided through one partner, it is easier to negotiate volume agreements, which lead to savings.
How can project accommodation costs be budgeted in advance?
To create an accurate budget, the project manager should request a binding accommodation offer from a service provider during the project bidding phase. It is likely that many accommodation providers will not provide binding agreements in advance, but it still pays to keep this requirement before any accommodation contracts are signed. In order to get a binding agreement for accommodation, you will at least need to know how long your project will last, the amount of employees and the required location for accommodation. Once you have the binding agreement for accommodation in hand, you can include accommodation costs in the price of your project bid. You protect yourself from bidding too low or too high on your project.
Collective bargaining agreements
When choosing accommodation, the collective bargaining agreement under which the employees are working should be taken into consideration. Some collective bargaining agreements specify minimal requirements for employee, such as should every employee have their own room or can rooms be shared. There are also collective bargaining agreements which set a minimum room size.
A fixed price which is agreed upon in advance is most often the cheapest option, but in unexpected situations it can be difficult to terminate a fixed-term contract. Forenom’s project accommodation experts advise building an accommodation package which includes both affordable fixed-price accommodation, as well as slightly more expensive but flexible accommodation. Sometimes projects are run under extremely tight budgets. When this is the case, savings have to be found everywhere to ensure the highest profitability possible. Next we’ll provide 5 tips for lowering accommodation costs.
5 ways to save on accommodation
- Provide your team with a roomy, homelike apartment instead of multiple hotel rooms. Multiple employees can fit into one spacious apartment, which causes the nightly price per employee to drop dramatically. Employees can prepare their own breakfast and dinner, and they don’t need to constantly be eating out or store their own food in a small mini-bar.
- Reserve accommodation for the time you need it. Choose an accommodation partner which can arrange accommodation for the exact time frame necessary, even if it means starting in the middle of a month. Also, reserve accommodation for the entire expected time frame, not in small portions. When your accommodation is planned and the length of your project is known, it pays to reserve accommodation for the entire time. Longer accommodation contracts are noticeably cheaper than short contracts.
- Only buy the services you need. If your employees won’t be able to use laundry or breakfast services, you should make sure these services aren’t hidden inside of a nightly price. Choose a partner who will allow you to select the services you want, and pay only for what you use. It’s enough for some that the apartment is cleaned on a weekly basis, and bed linens and towels don’t need to be changed daily.
- Look for accommodation well in advance. Usually the most expensive accommodation contracts are those created at the last minute. Generally, the closer the arrival date, the more expensive the accommodation. It helps to have accommodation centralized with one partner for a fixed price.
- Avoid seasonal pricing. Don’t accept accommodation contracts which allow accommodation providers to raise prices during high season.
HOW TO BUDGET FOR AND CONTROL ANNUAL ACCOMMODATION COSTS?
Annual accommodation costs include all costs incurred through accommodation services during a year. In other words, annual costs often come from the aforementioned project expenses.
On the other hand, annual costs can accumulate quickly due to irregular hotel stays during the year. Some businesses use hotels regularly. In any case, it pays to keep a close eye on management of costs.
You gain the most control over your accommodation costs by choosing a partner who will commit to fixed nightly prices. It is difficult to find accommodation providers who will agree to this type of deal, but by combining the total volume of your accommodation needs with your negotiation skills, you will succeed.
Tracking and reports
Make sure that your accommodation provider can offer you tools which make your accommodation expenses transparent. An extranet is a good example, as it can give you easy access to bills, reservations and reports all in one place. Measuring is the key to results.
“If you can’t measure it, you can’t improve it.” – Peter Drucker
Contact us, and we’ll help you asses your accommodation needs!