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Penny Wise and Pound Foolish


Over a decade back, a small write up on how the housekeeping department in a hotel demanded for more linen, keeping in mind the year’s projected occupancy, was ignored and the purchase allocated much less than what was likely to be required. Are we any different today?

It was October and the Executive Housekeeper at a 250-room property had put together the housekeeping budget for the next year, requesting `8 lakhs for linens. She based this number on last year’s linen use and projected occupancy for next year, with eight per cent increase thrown in to allow for cost increases.

This was presented to the Purchase head. While agreeing to most of the demands listed by the housekeeping during the review meeting in November, the purchase cut the linen allocation to `7 lakhs. The cuts were made in the budget to meet next year’s profit goal, and linen was an area purchase department felt could be trimmed. The General Manager too approved the cut in linen.

Late December, the approved budged reached the Executive Housekeeper. Well, this was no surprise to housekeeping, but the EHK was disappointed to see the money for replacement linen reduced for next year.

Hotel Managers throughout the industry are notoriously cautious with linen spending. To quote a General Manager reasoning with a housekeeper, “Why should I buy you more? You’ll just use it.” The EHK could never get the GM to see that housekeeping would use the additional linen because it was truly needed, not because housekeeping wanted to be wasteful or have an unnecessary cushion.

In a memo to the purchase, the EHK explained why the linen budget was proposed for Rs 8 lakhs and how cutting it down by one lakh rupees was likely to result in a late-year disaster and highlighted the some of the problems the hotel might experience if a linen shortage occurred. The EHK also suggested that the original request of `8 lakhs might even be too low, depending on the type of group occupancy the hotel is likely to attract next year. Certain groups are harder on linens than others. For example, wedding groups (mehendi, facial, hair colour – total room linen is messed up), groups that bring children along – are especially hard on linens.

After reading the memo, purchase called the EHK and appreciated the concerns, but felt the hotel could survive on `7 lakhs linen allowance.

Purchase dismissed the topic with an assurance that the linen spending will be considered in the next year’s budget. ‘Maybe next year’ is a phrase so commonly used and more in the hospitality segment where budgets are rarely violated as it involves a tedious process.

With a big OK, the EHK quietly crossed her fingers, hoping the hotel could squeak through one more year without linen becoming a major problem. In case of emergencies, the purchase along with the GM could jointly sanction additional budget amount by 5% out of Contingency Fund. For higher amounts, matter has to be referred at the Corporate Level involving a lot of procedure and questioning.

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