Skillful project management pays less than half for project accommodation compared to mediocre project management. Smart accommodation agreements positively impact your ability to provide competitive offers as well as improve your profitability. With their 18 years of industry experience, our accommodation experts garnered a 9-point checklist on how to control costs on project accommodation.
Especially in the manufacturing and construction industries, project costs can be difficult to forecast due to the impact and scale of project delays. By controlling accommodation costs you can, however, improve the profitability of a single project. Also, 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. This is where accommodation cost control plays an important role.
How to control project accommodation costs?
1. Get a binding accommodation offer
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 agree to binding agreements in advance, but it pays off to demand it before any accommodation contracts are signed. In order to get a binding agreement for accommodation, you will at least need to know the following:
- how long your project will last
- the amount of employees
- 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.
2. Check 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.
3. Demand flexible terms
A fixed price agreed in advance is most often the cheapest one, 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. Also, don’t agree to a contract which allows the accommodation provider to increase room rates during high season.
4. 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 to one partner for a fixed price.
5. 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 are able to 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. It’s often necessary to also be able to do laundry in the apartment. Remember that a satisfied workforce is a prerequisite for a successful project!
6. Reserve accommodation exactly 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.
7. Only pay for the services you need.
If your employees won’t be using ironing or breakfast services, you should make sure these services aren’t hidden inside the room rate. 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.
8. Centralize accommodation to one partner
By centralizing all of your company’s accommodation needs to one partner, you’re in a better position to negotiate on your requirements. As for the project’s accommodation, the process speeds along and your partner develops a deeper understanding on your wishes and needs. This way you’ll save not just on costs but also on time, as you won’t constantly have to search for the optimal solution yourself and direct a new partner.
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.
9. Track your costs
The old saying goes, what you measure is what you’ll get. Once you start measuring accommodation cost savings, you’ll start getting them. So 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.
Be in touch! We’ll help you map out your accommodation needs!