For years, I have reviewed operating statements in which virtually everything seemed to have an explanation. We knew how much we spent on staff, how much electricity had increased, what percentage of revenue went to commissions, how much laundry cost, what variance food and beverage consumption had accumulated, or how much a particular line item was affecting us. However, there was one figure that never appeared in any report: how much poor work was costing us.

I am not necessarily referring to working too little or having poor professionals. In fact, I have found some of the greatest inefficiencies precisely in exceptionally committed teams. People who rush, call, ask, correct, check again, solve problems and reach the end of the shift exhausted. The problem is that being very busy and being productive are not necessarily the same thing. A hotel can have everyone working intensely and still waste hundreds of hours every month.

Over time, I have learned to look at operations differently. When a room has to be inspected twice, when reception repeatedly calls housekeeping to find out whether a room is available, when maintenance receives three different reports about the same issue, when a waiter needlessly crosses a dining room dozens of times, when an invoice has to be corrected, when a guest request passes through four people before being resolved, or when a simple decision requires three approvals, the hotel is consuming resources without creating additional value.

That consumption rarely appears as such on the profit and loss statement. It remains hidden within payroll, overtime, purchasing, compensation, wastage, maintenance, complaints or simply within a phrase we hear far too often in Hospitality: “that is simply how we have always done things here”. This is why I believe that an important part of hotel profitability is not simply about selling more or buying more cheaply. It is about eliminating work that should never have been necessary in the first place.

And that, for me, is one of the great opportunities in today’s Hospitality industry. Before asking how many people we need, perhaps we should ask how much unnecessary work we are generating. Before demanding greater productivity, we should check whether our processes truly allow people to be productive. And before cutting visible costs, we would do well to learn how to detect something far more dangerous: the invisible cost factory we have built within the hotel itself.

The profit and loss statement we do not see

A hotel is an operationally complex organisation. Reception, reservations, housekeeping, maintenance, kitchen, restaurant, administration, sales, revenue management, purchasing and management operate as separate departments, yet the guest experiences the outcome as a single organisation. This creates an initial paradox: we work by departments; the guest experiences processes.

Their room must be ready. Their reservation must contain the correct information. Their preferences must be known. The issue they report must be resolved. The table they reserve must be available. The bill must be accurate. Their departure must be effortless.

Guests care very little about how many departments were involved in making that happen.

The problem arises when our internal processes force us to do far more work than necessary to deliver that outcome.

The Lean philosophy has spent decades studying precisely this phenomenon. It traditionally identifies waste such as waiting, unnecessary movement, transport, overprocessing, inventory, overproduction, defects and underutilised talent. In service organisations, research has particularly identified defects and waiting as significant sources of waste.

Applied to a hotel, the concept is immediately recognisable.

There is no need to turn the property into a factory or cover the walls in Japanese terminology. It is enough to walk through the hotel one morning and observe what people actually do.

We will probably find a substantial share of these costs:

• Rework. Something was done once and has to be done again. A room that was checked and must be checked again, a corrected invoice, a reservation amended because information was entered incorrectly, a reset setup, or an order that must be prepared again. Rework is particularly dangerous because it looks like productive activity. We pay twice to produce something once.
• Waiting. One person waits for approval, reception waits for confirmation from housekeeping, housekeeping waits for maintenance, a guest waits for their room, the kitchen waits for an order to be entered correctly, or administration waits for documentation. A five-minute wait may seem insignificant. Multiplied across people, shifts, departments and 365 days, it starts to look much more like a budget line.
• Unnecessary movement. Walking also costs money. Looking for keys, amenities, products, documents, trolleys, cleaning materials or utensils because they are not where they should be creates thousands of small journeys. None seems important in isolation. Their total certainly is.
• Duplication. Recording the same information in different places, maintaining parallel spreadsheets, printing information that already exists, entering data another department has already entered, or preparing virtually identical reports for different recipients. When I ask why we do some of these things, an alarmingly frequent answer is: “because it has always been sent.”
• Errors. A wrongly assigned room, a preference that does not get through, an incorrect rate, an inaccurate invoice, a forgotten charge or a request that disappears between shifts. The cost of an error does not end when it is corrected. It may include the time of several employees, compensation, lost revenue, team fatigue and a deterioration in the guest experience.
• Overprocessing. Adding checks, signatures, emails, meetings, approvals and verifications that do not provide proportionately greater security or value. We sometimes confuse control with bureaucracy. They are very different things.
• Recurring issues. Probably one of my favourite indicators. If we resolve the same issue twenty times, perhaps we do not have twenty issues: we have a process problem that we have chosen to solve twenty times instead of resolving once.
• Information that arrives too late. A correct decision made too late can produce virtually the same outcome as a wrong decision. This happens with staffing, purchasing, maintenance, inventory, availability, pricing and virtually every area of the hotel.
• Underutilised talent. Perhaps the saddest form of waste of all. Capable people spending a significant part of their day searching for information, copying data, chasing answers or solving entirely avoidable problems. We not only lose productivity; we ultimately erode their motivation.

The literature on hotel operations reminds us of something fundamental: a hotel simultaneously combines guest-facing operations and numerous back-office processes, while having to control costs, generate revenue and maintain service standards. That interdependence explains why small coordination failures can quickly spread throughout the entire operation.

There is an idea I use to explain this internally:

The real cost of a task = time required + waiting + travel + coordination + errors + rework.

We usually measure only the first part.

Let us imagine something extremely simple.

A hotel has 100 employees. Let us assume, purely as an exercise, that each person loses an average of 15 minutes per day to searches, waiting, duplication, unnecessary communication and minor rework.

It does not seem dramatic.

That amounts to 25 hours per day.

Over 300 days, that would amount to 7,500 working hours.

If the average fully loaded labour cost were, for example, €18 per hour, we would be talking about €135,000 per year.

And we are still talking about only fifteen minutes.

I am not suggesting that every hotel incurs that cost or that all of this time can be eliminated. That would be absurd. The example serves to illustrate the scale of the phenomenon. That is precisely why it is so useful to calculate it at each property.

As a benchmark for the economic significance of working time, US employment cost statistics put average employer compensation in accommodation and food services at $19.71 per hour in the fourth quarter of 2025, including wages and benefits.

The important lesson is not to transfer that figure directly to Spain, because labour structures differ. It is to understand that every minute of work has an economic cost, even if that minute is hidden in accounting terms within the payroll bill.

There is also a second effect.

Disorganisation consumes capacity.

If housekeeping loses time looking for supplies, reception chasing information, maintenance handling duplicate reports and managers constantly resolving exceptions, eventually we conclude that we need more people.

Sometimes that will be true.

But other times we are adding capacity to an inefficient process.

I consider this distinction fundamental when discussing hotel management and hotel profitability. Reducing waste does not mean reducing headcount. It means ensuring that people’s time is used where it genuinely creates value.

In fact, there is a question I find far more interesting than “can we work with one fewer person?”:

How many hours are we paying our team each week to solve problems created by our own organisation?

The answer may be uncomfortable.

But that is precisely where improvement begins.

From the busy hotel to the hotel that flows

For a long time, we have associated hotel productivity with intensity. If we see activity, we assume things are working. Ringing phones, walkie-talkies, messages, employees walking quickly, managers moving in and out of meetings, and someone constantly solving problems all convey a sense of dynamism.

I increasingly distrust that image.

When an operation truly works well, something far less spectacular tends to happen: things happen when they need to happen.

The room becomes available when reception needs it. Information accompanies the reservation. Supplies are where they are used. Preventive maintenance avoids some corrective maintenance. Issues have an owner. Shifts know what remains pending. Routine decisions do not escalate unnecessarily. Managers can manage because they do not spend all day firefighting.

That is operational flow.

And it has enormous economic value.

The Lean approach insists precisely on distinguishing activity from value creation. Its traditional classification includes waste such as transport, inventory, movement, waiting, overproduction, overprocessing, defects and unused capabilities. Recent research continues to use this framework to study operational efficiency.

But there is an important caveat. Lean does not mean indiscriminately eliminating resources. A recent academic review reminds us that waiting, inspection or apparently surplus capacity may fulfil necessary functions relating to safety, learning or resilience. The point is not to label everything as waste, but to understand why each activity exists and what function it protects before eliminating it.

I find that nuance particularly important in Hospitality.

A hotel should not become an operation obsessed with saving seconds.

Hospitality requires conversation, empathy, observation, personalisation and even a degree of deliberate “inefficiency”. Five minutes spent speaking with a guest may seem unproductive when measured with a stopwatch, yet be extraordinarily productive from a loyalty perspective.

Lean Hospitality is not about doing everything faster. It is about removing what prevents us from devoting time to what truly matters.

That is why, if I wanted to start identifying a hotel’s invisible cost tomorrow, I would not begin by buying anything. I would begin by observing.

For one week, I would record five very simple variables:

1. What we are doing twice. Every repetition should spark curiosity. Why did it need to be repeated?
2. Where people wait. Guests and employees. Waiting often reveals synchronisation problems between processes.
3. What information we chase. Every recurring call, message or question made to obtain a piece of information may indicate that the information is not available where it should be.
4. Which issues recur. I would not simply count incidents; I would measure recurrence and root cause.
5. Which tasks frustrate the team. The people who carry out a process every day usually understand its inefficiencies far better than those of us who design it from an office.

I would then introduce a metric I rarely find on hotel dashboards:

non-value-added hours.

It does not need to become a sophisticated KPI immediately. It can begin as an estimate.

Time spent correcting errors.

Time spent waiting.

Time spent searching.

Time spent duplicating information.

Time spent resolving recurring issues.

Time spent on avoidable coordination.

And I would convert that time into euros.

That is where something interesting happens.

Saying that reception spends too much time on certain checks may prompt debate.

Saying that this process consumes 420 hours per year and costs approximately €8,000 completely changes the conversation.

Suddenly, we are no longer talking about operational inconveniences.

We are talking about profitability.

I would also measure another indicator:

First Time Right, or the percentage of processes completed correctly the first time.

Rooms prepared correctly the first time.

Invoices correct the first time.

Reservations entered correctly the first time.

Requests resolved without repetition.

Set-ups completed without corrections.

The higher that percentage, the smaller our hidden factory.

And I would add one final dimension: the cost to the guest.

Because an internal inefficiency can quickly turn into a poor external experience.

Research into the hotel experience has spent years specifically examining issues such as service failures, recovery, perceived waiting times and closing the feedback loop. The reason is simple: what may be a minor operational anomaly for us can become a highly visible part of the guest’s stay.

Disorganisation also has a particularly dangerous characteristic: it becomes normalised.

“It always happens on Mondays.”

“Reception has to call.”

“It has to be checked manually.”

“Housekeeping always asks.”

“That invoice always has to be corrected.”

“That report takes far too long.”

“When a group arrives, we already know what it will be like.”

Whenever I hear the word “always” before an operational problem, I try to pay attention.

Because we have probably just found a process worth reviewing.

It is also important to avoid the opposite mistake. Not every process should be optimised down to the last second. Operational excellence is not about creating mechanical hotels. It is about creating reliable organisations so that people can be more human.

That is why my first recommendation would be simple: walk the hotel by following a process, not a department. Follow a room from the moment it becomes vacant until it is handed over again. Follow an issue from the moment the guest reports it until it is closed. Follow a reservation from the moment it arrives until the guest leaves the property. When we observe the complete process, we uncover waste that no department, viewed in isolation, could ever identify.

The second would be to ask the team more and impose fewer solutions from above. A question as simple as “what absurd thing do we all do every day that we could avoid?” can generate an extraordinarily valuable list. People generally do not need someone to explain where they lose time. They experience it every day. Our responsibility is to create an environment in which they can point it out without it appearing to criticise anyone, and to turn that knowledge into improvement.

And the third would be not to turn this philosophy into a cost-cutting campaign. If the team interprets every improvement as ultimately eliminating jobs, they will immediately stop identifying inefficiencies. The objective should be exactly the opposite: eliminate useless work to recover useful time. Time to provide better service, sell better, maintain the hotel better, train, anticipate, observe the guest and think. Because one of the smartest ways to improve a hotel’s profitability is probably not to make our people do ever more things, but to ensure that they no longer have to do so many things that should never have been necessary.