Working on the economics of cost cutting

The ongoing battle to successfully curb the continuing rise of costs for essential commodities continues to be the major challenge for businesses large and small throughout Australia and internationally as the world continues to recover from the GFC.

The challenge for business managers is to control costs, maintain services and demonstrate value for money to all clients and customers. Recent announcements of the threat that essential services such as the retail electricity supply rising by 21% has resulted in governments intervening to cap any cost rises and to reorganise the industry to control costs.

Daily we are learning that a number of key industries are re-assessing their viability and this includes the high profile domestic car manufacturing industry as a headline example. The regular release of statistics indicates that while the mining boom may have peaked because of global pricing falls, there were still a significant number of major projects underway and unemployment figures have remained reasonably steady.

Importantly Australian governments are continuing to address the fiscal issues of the domestic economy and are investing in key historic growth sectors including the need for modern planning for Australia’s growing population and also supporting flagship industries such as domestic tourism. The revitalisation of historic suburbs in cities and regional centres to make better use of existing infrastructure has resulted in a revival of the construction industry as new density living complexes are established with a rejuvenation of local economies.

Australians continue to take regular holiday breaks and, while there has been an increase in the number of off shore holidays, the latest figures continue to show a growth in domestic holidaymakers and a significant increase in international tourists coming from Asia and Europe. The events market that has seen huge holiday migration for the Lions football tour and the Manchester United visits are further indicators that these initiatives, along with the wonderful natural attractions that Australia boasts is a significant catalyst.

In our education programs, we at ARAMA hold regular meetings through our regional networks to back up our support network for our members to ensure that they are up to date with all initiatives that affect the resident management industry. Like many associations, ARAMA is supported by industry partners and when it comes to cost control, we are always very interested in ensuring our members maximise the opportunities to control costs on behalf of owners and investors.

In today’s high rise and density living complexes, air conditioning is an essential element but it can be the most expensive appliance in an accommodation situation, usually accounting for 50% of all power use. The air-conditioning units are often left running when accommodation is left empty.

An ARAMA corporate partner is one of the new state of the art organisations whose products offer direct cost control savings. The sensor device attached to the indoor unit, automatically turns off air conditioning in rooms left empty. The devices are specifically designed to reduce split system air-conditioner power consumption, lessen equipment breakdown and maintenance costs, and extend the longevity of the capital asset.

In the competitive market place the use of technology is a major contributor in cost control and enhancing the long term asset management of equipment. As the company points out, using the technology equipment, it is self funding from day one with the electricity cost savings.

As an industry organisation, ARAMA provides an advocacy service for the industry with government and other industry stakeholders along with the practical advice and assistance to all members. This year we have proactively visited all branches to update members on the latest technology opportunities available to the accommodation industry and to high density permanent living complexes. Importantly there is a two-way exchange, with members sharing their experiences in cost management and practical solutions to day-to-day issues that impact on the operations of complexes.

We are all aware from the headlines that the cost of energy is continuing to rise, despite changes in ownership and the administration of public generators and distributors. Innovation can always provide opportunities for resident managers and there continue to be new solutions emerging to enhance the day to day operations of complexes and ARAMA will actively work to deliver practical solutions to our industry.

We will continue to generate forums that provide practical and economic solutions to the day to day management of properties under our 24/7 watch.

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