Page 3 - There's NOI in Team - SIB Hotel Industry Whitepaper

Paying for things like recycling when the city picks it up for free, or over-service (Why pay for 20 phone lines when you only need five?) represent costs that add up, yet easily can be avoided.
Misconceptions about the general awareness of costs can be, well, costly. Companies routinely lose hundreds of thousands, if not millions, of dollars due to decentralization and turnover, each of which tends to bury the impact of long-executed agreements with vendors.
Sometimes it’s just plain price, as was the case for a brand name New York hotel that was being significantly overcharged for medical waste – 90 percent more. A fresh look at the rate structure left the property with tens of thousands in annual savings with no change to their normal business.
Other times, it’s execution. The price may be right, but you would be surprised how often vendors have trouble taking a new agreement live. That was costing a bank in the Carolinas (with only about 20 locations) more than a few hundred thousand dollars, until it was discovered that the rates it negotiated were never implemented. Then there is human error, like the kind that caused a global healthcare firm millions over a three-year period, all resulting from erroneous invoices.
While the issues above might sound implausible to most executives, they paint a vivid reality that money is needlessly seeping through the cracks of even the most well-equipped, well-intended organizations.
Without the help of an outside team of experts, internal administrative tasks are getting left unattended inadvertently and unbeknownst to ownership.
Paying for things like recycling when the city picks it up for free, or over-service (Why pay for 20 phone lines when you only need five?) represent costs that add up, yet easily can be avoided.
That’s why the stigma surrounding third-party experts is so dangerous for property owners. Often, it is assumed that good business relationships alleviate any cause for concern. Frankly, it’s blissful ignorance. In none of the examples above was it the intention of the company to waste money. Likewise, the vendors in these (and many other) instances were not purposely egregious, evidenced by how quickly each atoned for its mistake and issued credits or restructured deals.
www.aboutsib.com