Revenue and cost management in the hotel industry is more important than ever in the post-COVID era. General cleaning costs have jumped worldwide due to new cleaning protocols, meaning the average US hotel of 250 rooms could be spending close to $130,000 annually on cleaning alone.
With new guidelines and procedures being introduced over the past two years to help combat the effects of COVID in hotels, the focus is being put on the cleanliness of hotels. Guest satisfaction has taken a U-turn - being generally more negative. Guests are more likely to complain if something is not up to their standards.
These complaints can get costly if left unchecked, and the last thing anyone needs is losing revenue due to bed bugs on top of all of the challenges they face. There are a lot of different factors that determine the true cost to get rid of bed bugs from your hotel, not just the cost of bed bug extermination.
Loss Of Room Revenue
Losing revenue from the affected rooms can have a damaging effect on reaching your revenue goals and therefore can put a strain on the business if troubles were to arise.
On average, dealing with bed bugs will take a room out of service for seven days. Depending on the amount of rooms affected, your Revenue Per Room (RPR) will be massively affected. The average daily rate for a room in the US is $119 per night (before taxes and fees). The more rooms known to have a problem with bed bugs, the more rooms out of service, meaning the higher RPR loss.
Depending on how booked up your hotel is, you may be able to negate this revenue impact by shuffling guests around. This may not be possible for smaller hotels, or if entire floors of the hotel are closed off.
On top of this, there is a period after pest control treatment that you might not be able to rent out the rooms - adding further to the loss of revenue.
Guest Complaints and Risk to Reputation
A bed bug infestation in even just one of your rooms can completely ruin the reputation of any hotel. In the age of social media - it can be entirely out of your hands what guests do with their negative experiences, especially when it comes to bed bugs.
In general, having high reviews can warrant a higher price point for the rooms. Low-rated properties are less likely to be chosen by travelers, so it is important that you try to avoid negative situations arising in the first place.
The minimum that you can do to limit the fallout from an agitated guest is to offer to not charge them for their stay. You can also offer compensation - another stay in a different hotel, free food, or services. Worst case scenario, you may have to offer monetary compensation to stop the guest from taking their complaints public - which could destroy the hotel's reputation in an instant.
Litigation & Treatment Costs
There are a lot of states within the US that both allow and encourage disgruntled guests to sue a hotel for a variety of issues related to injuries from bed bugs. These range from basic pest control costs, to large medical costs for physical and mental injuries caused by attacks from bed bugs.
These lawyers take into account various factors that could strengthen the case and therefore increase the litigation payout. The average settlement ranges from $25,000 - $50,000 but can reach up to $500,000 and further.
Similar to social media and media outlets, facing a lawsuit can be business-ending. Not only do you face legal fees and victim payouts if you lose or are forced to settle but, even if you win, the business's reputation will be in jeopardy.
Whether the business is subject to litigation or not, professional bed bug extermination is just one of the costs that will affect your business’s P&L. There are various methods of treatment, the average cost ranging from $200-$300 per room. However this can rack up: using the earlier example, 5 rooms would cost between $1,000-$1,500. And the treatment isn’t guaranteed to be 100% effective.
Other forms of treatment will raise the cost of bed bug extermination further.
Loss of customer loyalty will deal a substantial blow to your business - as the customers that regularly book rooms in your hotel will be less inclined to in the future and therefore add a big part to the general loss of revenue.
Management costs usually slip under the radar when it comes to costs that you find when battling a bed bug infestation. Extra management staff may need to be augmented into the business to deal with the workload of the managers now working with the pest controllers etc.
Prevention is Best
All of the costs from these various components rack up quickly and can easily put your business deep into the red. Setting up preventative measures within the business is the best way to limit the costs due to the spread of bed bugs throughout the hotel.
Spotta notifies you of the first signs of a bed bug infestation, meaning that you can seal off the room and take action before your guests are affected. This ensures that spread is prevented and therefore the costs associated are minimized. The service also means that you continually prevent future bed bug infestations.