classic philosophy in hospitality goes like this: customers – whether leisure,
business, corporate group or SMERF members - require services provided by super
nice, smiling, well-trained humans.
Think the Ritz Carlton’s employees and
their little “Gold Standards” handbook that ensures above-and-beyond customer
service. After all, the reasoning goes, this is the why our industry is called
“hospitality,” because our guests supposedly
expect their hosts - the hotel staff themselves - to provide “human” services
at all touchpoints of the guest experience.
the notion that guests are demanding human-provided services is greatly
exaggerated, especially today. A great example of why guests do not care about
human-provided services as much as some in our industry think comes from the
vacation rental sector.
hotels learn from vacation rentals?
close to a third of room nights in North America were consumed at vacation
rentals/ short-term rentals: houses, villas, condos and apartments. One third!
The vast majority of these short-term rental bookings were done online via
Airbnb, Vrbo, FlipKey, Vacasa, etc.
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imagine the whole vacation rental experience: you book online, receive online
confirmation and pre-arrival information (directions, keyless entry info,
destination info, etc.); upon arrival enter the unit using the mobile key or
keyless entry; enjoy your stay; pack your bags and leave on day of departure.
All of this while having a completely humanless experience! All of the “behind
the curtains” human involvement remains hidden from the actual guests: vacation
rental management, IT and technology management, revenue management and
distribution, marketing, housekeeping, utilities, maintenance, etc.
standard” at short-term rentals is customer experience without any human
contact between guests and hosts, and
yet guests are not only not complaining, but gobbling up this
“human-less” service and loving it! Over the past two pandemic years I have
spent more than 150 room nights at short-term rentals without seeing any of my
hosts in person even once!
that a third of travelers who consume accommodations have already experienced
human-less hospitality and are prepared to do so at traditional accommodation
types such as hotels, resorts, casinos, motels, etc.
Why is the
subject of human-provided services in hospitality so important?
three extremely important issues plaguing the industry today that need
immediate resolution: never-ending labor shortages, unsustainable labor
costs and inability to provide adequate services to the exceedingly
tech-savvy and DIY (do-it-yourself) customers.
Five years from now, the hospitality industry won’t be needing half the people it needed back in 2019, and the savings from payroll will mean the investments in next-gen technology will pay for themselves.
Max Starkov - hospitality consultant and strategist
According to the Bureau
of Labor Statistics, in October of 2021 the number of unfilled positions in
the U.S. reached 11 million, “only” 1.78 million of which were in leisure and
hospitality, which means that labor shortages are not a hospitality-native
We cannot simply “bribe” - with higher wages and sign-up bonuses -
people to work in hospitality, since professional services, retail, transportation,
utilities, manufacturing, construction, education, health and other industries
that pay much higher average wages are equally affected.
increased cost of labor in hospitality due to labor shortages is not to be
taken lightly. Total labor
costs per available room (LPAR) in North America came in at $47.50 in
September, which is at 96% of the comparable level from 2019. Similar is the
situation in Europe and APAC. Higher labor costs led to significant decreases
in all key profitability metrics, including gross operating profit (GOP).
to McKinsey, the pandemic accelerated digital transformation by 10 years,
and today’s travel consumers have become more digitally and tech-savvy than
ever. Many of today’s travelers’ service expectations are around self-service
and do-it-yourself, from online planning and booking, to preferences for
contactless check-in, mobile keys, voice assistants and communications with
hotel staff via messaging.
It is time for our industry to give the DIY-obsessed
customers what they want! Accelerated investments in technology are needed to
“appease” these exceedingly tech-savvy guests and their exceedingly high
view, only through accelerated investments in technology - cloud, mobility, AI,
robotics, IoT and other next gen technology applications and innovations - can
the hospitality industry solve the three major industry issues outlined above.
future: do more with less
goal imposed on hospitality by the marketplace is simple: do more with fewer
employees by using technology and thus reducing the property’s staffing needs
by a significant percentage.
can reduce your front desk staff by 50% or more by introducing mobile check-in
and mobile keys, self-check in kiosks, a chatbot on the website to handle
service and information requests, email reservation assistant app to handle
email requests, an issue resolution application and voice assistants in the
rooms to handle customer service for stay-in guests.
All of this can be
achieved at a fraction of
the payroll expenses.
Additionally, you can cut your housekeeping needs by
half if you introduce housekeeping-on-demand as one of the steps during the
mobile check-in or when checking in via the self-service kiosk in the lobby.
The arriving guest should be able to choose in advance the type of housekeeping
they are comfortable with during their stay: daily, once every three days,
weekly, etc. or no housekeeping, just leave fresh towels by the door.
allows better planning, scheduling and utilization of your housekeeping staff
and results in significant reduction in labor costs.
goes on and on. Technologies that exist today can significantly reduce staffing
needs and labor costs in all stages of service delivery, from pre-arrival
customer engagements to on-property guest services and post-stay customer
investor call earlier this year, Hilton CEO Chris Nassetta summarized nicely
the direction the industry is moving toward: “The work we’re doing right now in
every one of our brands is about making them higher-margin businesses and
creating more labor efficiencies, particularly in the areas of housekeeping,
food and beverage, and other areas.
"When we get out of the crisis, our
brands will be higher margin and require less labor than they did pre-COVID.”
hospitality ready for human-less services?
digital transformation, driven by data and next-gen technologies, is changing
both customers and hospitality at an unprecedented rate and hoteliers are
caught largely unprepared. What is stopping hospitality from adopting next-gen
technologies like AI, mobility, robotics, IoT, cloud, etc. to rebuild the new
hotel tech stack?
at this time there are three main impediments to the accelerated adoption of
next-gen technologies in our industry:
- Reluctance to invest in new
technologies by the real-estate minded owners and operators, a mentality that
has turned hospitality into one of the most technology-averse industries today
- Lack of understanding and fear of new technology: “Who will deal with it? I
don’t have trained staff to deal with it. It makes operations very complex,”
- The labor unions in major metropolitan areas with highly-unionized
hospitality labor force are dead set against any robotization and automation or
any technology advancement that can reduce the number of paying members.
view, none of the above can stop the rapid adoption of next-gen technologies in
our industry, in the same manner as the Luddite movement in early 19th century
England could not stop the Industrial Revolution.
technology ever replace humans in hospitality? A good question!
Over time, next-gen
technology will undoubtedly replace or augment collaboratively all mundane,
repetitive and dangerous jobs in hospitality like housekeepers, porters and
baggage handlers, concierges, security guards, line cooks, bar tenders,
waiters, etc. Technology will not be replacing anytime soon highly qualified
hospitality jobs like highly skilled and educated hotel managers, revenue
managers, digital marketers, technologists and IT managers, CRM experts, sales
mobility, cloud, robots and cobots (collaborative robots), IoT and other next-gen
technologies, the hotel – especially 4- and 5- star properties, can still keep
a “human guest-facing facade” but automate all of the back-end operations,
enable smart guest communications, and automate and personalize every touch
point with the customer. And sure,
add humans with a warm smile into the mix.
much human labor would a hotel need in the future? In my view, five years from
now, the hospitality industry won’t be needing half the people it needed back
in 2019, and the savings from payroll will mean the investments in next-gen
technology will pay for themselves.
About the author...
is a hospitality and online travel tech consultant and strategist.