ROSWELL, GA—Hotel Effectiveness, a provider of labor management software for the hotel industry, is all about optimizing labor costs. “Labor costs are a massive threat to hotel profitability today,” said Mike Martin, co-founder and CEO of Hotel Effectiveness, based here.
The technology company recently acquired LobbyLights, a wage comparison data provider for hospitality. “A big part of optimizing labor costs is paying competitive wages for every single position within the local market. LobbyLights is a completely complementary service that helps hotels to guide their compensation strategy,” said Martin.
“Hotel Effectiveness is already the most impactful technology to improve hotel profitability in the market today,” said Del Ross, chief revenue officer of Hotel Effectiveness. “By giving hotel owners and managers the ability to compare their hourly wage rates with similar hotels, we will deliver even more control over labor costs.”
While most hotels are experiencing dramatic increases in total labor expenses as a result of scarce labor, high wages and soaring overtime/contractor usage, Hotel Effectiveness enables customers to schedule only the labor that is required to meet the service standards they have set.
“This no-waste model creates a significant advantage for the owners and operators of hotels and enables above-market performance in challenging competitive environments,” said Martin. “Adding LobbyLights to the offerings of the company is part of our long-term effort to increase operating profits and margins for the industry.”
While there was some overlap between Hotel Effectiveness’ customer base and the clients of LobbyLights, most of the hotels only used one of these services.
“The cross-sell opportunities were attractive to both companies,” he said. “In addition, the services complement each other, with the addition of competitive wage data to the award-winning Hotel Effectiveness labor management platform enhancing the already high value we bring to our clients. Without LobbyLights, our labor management customers save 5-15% on total labor costs. With the addition of competitive wage data, hotels will be able to experience even greater efficiencies, boost employee retention, protect profit margins and improve overall competitiveness.”
What made LobbyLights an attractive addition to the company’s current offerings? Martin saw significant value for his clients.
“LobbyLights is a market leader in hotel wage benchmarking, and its service breadth and quality are the highest in the industry. We saw this as an excellent addition to our core service offering,” said Martin. “We already provide a lot of other benchmarking data to our customers. Customers frequently ask us for compensation benchmarks, so it is a natural expansion for us to include compensation benchmarking by position as well. Compensation strategy is critical to getting perfect labor costs. No hotel can afford to pay more than they have to for the scarce labor they require.”
Following the acquisition, the company will begin integrating the LobbyLights service into the Hotel Effectiveness Labor Management application.
“As part of our work to optimize total labor expenses, we analyze actual wage data and will compare this with the surveyed data from LobbyLights,” said Martin. “The resulting benchmark data will be more complete and more accurate than any other service and will support our hotels as they make decisions about wage rates and non-monetary compensation and benefits. Over time, we will develop new applications and service offerings using the combined data from both companies.”
Hotel Effectiveness serves more than 3,000 hotels in North America, including every major brand and the largest owners and operators in the U.S. and Canada.
“Interstate Hotels, Wyndham Hotels & Resorts, Remington Hotels, McKibbon Hospitality and Apple Hospitality REIT are some of our larger customers today,” said Martin. “With the competitive wage benchmarking data provided by LobbyLights, our customers will be able to make the best possible decisions about wages and total compensation. This will enhance our customers’ ability to recruit and retain the best talent in their local markets and remain competitive in a highly volatile wage market.”