The classic philosophy of the hospitality industry is as follows: customers – whether they are leisure, business, corporate groups or members of SMERF – need services provided by super kind, smiling humans and well trained.
I think the idea that clients demand human-provided services is greatly exaggerated, especially today. A prime example of why customers don’t care as much about human-provided services as some in our industry think comes from the vacation rental industry.
What can hotels learn from vacation rentals?
In 2021, almost a third of overnight stays in North America were consumed in vacation rentals / short-term rentals: homes, villas, condos and apartments. A third! The vast majority of these short term rental bookings were made online through Airbnb, Vrbo, FlipKey, Vacasa, etc.
Just imagine the whole vacation rental experience: you book online, receive online confirmation and pre-arrival information (itinerary, keyless entry information, destination information, etc.); on arrival, enter the unit using the mobile key or keyless entry; Enjoy your trip; pack your bags and leave on the day of departure.
All this while having a completely human-free experience! All human involvement “behind the scenes” remains hidden from real customers: management of seasonal rentals, IT and technological management, management and distribution of income, marketing, housekeeping, public services, maintenance, etc.
The “gold standard” for short-term rentals is a guest experience without any human contact between guests and hosts, yet guests not only complain, but gobble up and love this “human-less” service! In the last two years of the pandemic, I have spent over 150 nights in short term rentals without seeing any of my hosts in person, even once!
This means that a third of travelers who consume accommodation have already experienced human-free hospitality and are ready to do so in traditional types of accommodation such as hotels, resorts, casinos, motels, etc.
Why is the topic of human-provided services in the hotel industry so important?
There are three extremely important issues plaguing the industry today that require immediate resolution: endless labor shortages, unsustainable labor costs, and the inability to provide services. suitable for extremely tech-savvy customers and DIY enthusiasts.
According to the Bureau of Labor Statistics, in October 2021, the number of job vacancies in the United States reached 11 million, of which “only” 1.78 million are in the leisure and hospitality industries, meaning that labor shortages are not a problem native to the hotel industry.
We cannot simply ‘bribe’ – with higher salaries and enrollment bonuses – people to work in the hospitality industry, as professional services, retail, transportation, utilities, manufacturing, construction, education, health and other industries that pay much higher average wages are also affected.
The rising cost of labor in the hospitality industry due to labor shortages is not to be taken lightly. Total labor costs per available room (LPAR) in North America reached $ 47.50 in September, or 96% of the comparable level of 2019. The situation is similar in Europe and Asia-Pacific. Higher labor costs resulted in significant declines in all key profitability metrics, including gross operating profit (GOP).
According to McKinsey, the pandemic has accelerated the digital transformation by 10 years, and today’s travel consumers have become more digital and tech savvy than ever. Many of the service expectations of today’s travelers relate to self-service and do-it-yourself, from planning and booking online to preferences for contactless check-in, mobile keys, voice assistants and communications with hotel staff via messaging.
It’s time for our industry to give DIY obsessed customers what they want! Accelerated investments in technology are needed to “appease” these extremely tech-savvy customers and their extremely high technology expectations.
In my opinion, it is only through accelerated investments in technology – cloud, mobility, AI, robotics, IoT and other next-generation technological applications and innovations – that the hospitality industry will be able to solve the three major problems of l industry described above.
The future: doing more with less
The ultimate goal imposed on the hospitality industry by the market is simple: to do more with fewer employees by using technology and thus reduce the staffing requirements of the establishment by a significant percentage.
Example: You can reduce your reception staff by 50% or more by introducing mobile check-in and mobile keys, automatic check-in kiosks, a chatbot on the website to manage service and information requests, a email reservation assistant app to manage email inquiries, a problem-solving app and in-room voice assistants to manage customer service for guests staying on site.
All of this can be achieved at a fraction of the salary expense.
Plus, you can halve your housekeeping needs if you introduce on-demand housekeeping as one of the steps during mobile check-in or when checking-in through the self-service kiosk in the lobby. The arriving guest should be able to choose in advance the type of cleaning they feel comfortable with during their stay: daily, once every three days, weekly, etc. or no cleaning, just leave clean towels by the door.
This allows for better planning, scheduling and utilization of your housekeeping staff and results in a significant reduction in labor costs.
The list is lengthened increasingly. Technologies that exist today can dramatically reduce staffing requirements and labor costs at all stages of service delivery, from pre-arrival customer engagements to on-site customer services and retention. of customers after the stay.
In a call to investors earlier this year, Hilton CEO Chris Nassetta summed up the direction the industry is heading in: especially in the areas of housekeeping, food and drinks, and other areas.
“When we come out of the crisis, our brands will have a higher margin and require less manpower than before COVID. “
Is hospitality ready for human-less services?
The digital transformation, driven by data and next-generation technologies, is changing both guests and hospitality at an unprecedented rate and hoteliers are largely caught off guard. What is preventing the hospitality industry from adopting next-generation technologies such as AI, mobility, robotics, IoT, cloud, etc. to rebuild the hotel’s new technology stack?
I believe that at present there are three main obstacles to the accelerated adoption of next generation technologies in our industry:
- Reluctance to invest in new technology on the part of property-conscious owners and operators, a mindset that has made the hospitality industry one of the most tech-averse industries today
- Misunderstanding and fear of new technologies: “Who will take care of it? I do not have qualified personnel to take care of it. This makes the operations very complex ”, etc.
- Unions in large metropolitan areas with a highly unionized hotel workforce are strongly opposed to any robotization and automation or any technological advancement that could reduce the number of paying members.
In my opinion, none of the above can stop the rapid adoption of next generation technologies in our industry, in the same way that the Luddite movement in early 19th century England could not stop the Industrial Revolution.
Will technology one day replace humans in the hospitality industry? A good question!
Over time, next generation technology will undoubtedly replace or collaboratively increase all mundane, repetitive and dangerous jobs in the hospitality industry such as housekeepers, porters and baggage handlers, janitors, security guards. , line cooks, bartenders, waiters, etc. Technology will not replace Highly skilled hotel jobs like highly skilled and educated hotel managers, revenue managers, digital marketers, IT technologists and managers, CRM experts, sales managers, etc.
Using AI, mobility, cloud, robots and cobots (collaborative robots), IoT and other next-generation technologies, the hotel, especially 4 and 5 star properties, can still maintain a “human facade to customers” but automate all back-end operations, enable intelligent communications with guests and automate and personalize each point of contact with the customer. And of course, add humans with warm smiles to the mix.
How much human labor would a hotel need in the future? In my opinion, five years from now the hospitality industry won’t need half the people it needed in 2019, and the payroll savings will mean investments in next-gen technology pay off.