Today’s hoteliers are faced with challenges that previously seemed unimaginable. Yesterday’s business models may now be obsolete, and tomorrow’s plan may require ongoing course corrections. New times call for new strategies, cross-department collaboration and technology tools that help you get back to business with enhanced efficiencies and data insights to attract and serve your hotel guests.
But before we get ahead of ourselves, we need to address the elephant in the room. The staffing crisis is certainly top of mind for many hoteliers. Even before the pandemic, hotels across the country struggled to fill positions. Then, as the world shut down due to COVID-19, the hotel industry began the painful process of laying off or furloughing nearly half of its workforce.
Fast forward to summer 2021: Travelers are coming back with a vengeance. On July 19, TSA checkpoint travel numbers were at 2.1 million as compared to 695,000 at the same time in 2020. Moreover, we are gradually getting closer to the 2019 traveler throughput of 2.6 million.
In the face of this, finding the right people to fill positions has become critical to navigating recovery. Fortune reports that more than 50% of hospitality workers wouldn’t return to their old jobs. Additionally, the U.S. Bureau of Labor Statistics showed the number of job openings was still at 9.2 million in May.
Now is the time to embrace the technology that will help fill this void. Hospitality will always be a people-first industry—on both sides of the front desk—but advancements in technology have enabled savvy hoteliers to do more with less while still maintaining both guest and staff satisfaction.
In assessing your hotel’s technology investment roadmap, the key question now is: What technology tools will have the greatest impact on your recovery? Here are some of the top tech solutions available now that will be instrumental in helping the industry regain its momentum and, in turn, increase profitability.
Technology & the staffing crisis
According to CBRE, labor is the largest cost of a hotel’s operation and it accounts for nearly half of total operating costs. With labor costs rising at a higher rate than revenues, it is a major cause of concern for hotels.
Companies like Hotel Effectiveness and Optii leverage technologies such as artificial intelligence, analytics, messaging and mobility, and are positioned to enable an at-a-glance look at labor efficiency and guest services.
In a recent Hotel Business Hot Topics session, executives discussed the challenges facing the hotel industry with regards to hotel labor management. Del Ross, chief revenue officer, Hotel Effectiveness, a company that works to save hoteliers time and money by automating labor management and providing real-time visibility into labor efficiency, provided unique insights on solving some of these challenges.
Ross noted that in order to set up your hotel for success from the beginning, it is necessary to implement smart labor standards and define the relationship between your business drivers and staffing needs.
It is recommended that standards are created from actual labor needs and operational data, based on occupancy, minutes per room, F&B covers and revenue. When payroll and contractor expenses are perfectly aligned with true operating requirements, waste is then eliminated.
With the constant day-to-day variations in hotel operations, managers must quickly modify staffing schedules. Using labor standards to schedule strategically for every position based on a viable forecast—a hotel’s anticipated business volume of rooms sold and check-in/check-out patterns—they can create a labor plan.
Finally, time is of the essence. It will be important to keep a close watch on labor hours. If something doesn’t look right, fix it right away and avoid spending thousands of unnecessary labor dollars. This is especially important for costly housekeeping, which is traditionally overscheduled by 10-20% daily.
Hotel Effectiveness provides a tool called PerfectLabor that enables GMs to easily prioritize scheduling and monitor labor dollars, particularly during a labor crunch.
Another time-saving technology tool to keep an eye on is Optii. The software automates and streamlines hospitality efforts through one platform that incorporates housekeeping, service and chat.
This data-driven platform employs predictive, intelligent AI to optimize room-attendant routes in real time and centralize operations. It also streamlines the operation by eliminating the need for telephones, reducing manual error and connecting all departments for lower costs and increased output.
Technology such as Optii can help hotels leverage guest and reservation data to gain better insights into their profile, using this to predict variations in clean times and update room attendant routes in real time. It also can automate tasks and workflows to enable the rapid completion of tasks. For example, technology can be used to make sure an inspector is notified instantly when a room is ready for inspection, reducing turnaround times.
Where hotels adopt an on-demand approach, they could also consider using technology to enable guests to select the type of housekeeping services they would like before they arrive. When they check in on a mobile app, message or website, the prospective guest should be able to choose the type of housekeeping they would like to request whether that is daily, every other day, weekly or no housekeeping.
Making the front desk contactless
New technologies continue to surface that enable growth and ensure the guest journey meets today’s expectations. Whether it’s offering flexible cancellation policies or enabling contactless check-in, hotels are beginning to adopt solutions that help guests book and enjoy their stay.
Some technologies provide a digital, self-service option for guests to reserve and pay for spa services or food orders. Others allow for remote, or contactless, check-in solutions. Virdee, a new player on the market connects best-in-class platforms for identity verification, payment collection, access control and remote support to provide a virtual reception solution.
Hotels require a litany of software and smart-hardware systems to operate. It’s increasingly difficult for owners and managers to handle integrations among all these systems. Often, the technology is left fragmented and ill-suited for seamless, end-user interaction—whether those end users are property staff or customers.
Using an API-first approach, Virdee integrates seamlessly with major access control suppliers its clients already use, such as Dormakaba and Salto for access control, property management software such as Opera, and payment collection systems such as Shift4.
By automating all the traditional functions of a front desk, Virdee helps hotels optimize their needs for on-site staffing. The costliest shifts for hoteliers occur during the highest and lowest periods of check-in demand. By leveraging the power of each guest’s smartphone and Virdee’s in-lobby devices, hotels can shift from three front-desk agents to one greeter, for example, and more effectively manage guest in-flow and out-flow. ID verification is also critical, and Virdee’s facial recognition technology helps hotels avoid costly verification processes while saving money on charge back and fraud.
As personnel needs shift and hotels struggle to meet the growing demand of travelers, a contactless check-in solution frees up current employees to focus on providing excellent customer service. Today’s health-conscious guests may appreciate this option as they check in and out, while relying on in-person connections with hotel personnel as needed.
Are salespeople still manning the front desk?
Meanwhile, hotels that haven’t turned to contactless check-in are likely still adjusting their staffing strategy. The reality is that in-person meetings and events (M&E) are returning faster than expected. With smaller staffs and shorter booking windows, sales personnel may still be manning the front desk of a hotel. For hotels that rely on group business as a key driver to profitability, it is time to readjust that strategy and ensure that the sales pipeline is recovering.
Staying ahead of demand by formulating a strategy to find and win group business through deep market and account intelligence will be a high value skill for hoteliers in the coming year. Knowland is a leading provider of data-as-a-service insights on M&E for the hospitality industry. With the industry’s largest historical database of actualized events, the company is poised to help hoteliers sell group bookings smarter and maximize revenue—especially in today’s environment.
It takes more than luck to bring in the right potential group business; it requires strategy and insight to focus limited resources on the business with the best fit. Moreover, it takes an investment not only in the right people, but the right technologies to ensure they are spending their time efficiently. In the past, RFPs were a key driver to fill the group business pipeline. Today, the market has shifted to prioritize different sources and will likely stay that way for some time.
When considering retooling the sales team, it will be paramount to take a hunter-style approach to sales. It will also require smaller teams have access to tools that increase the sales pipeline and boost the probability by helping them close new business.
Advancing the RMS to maximize business revenues
Online services or apps that help hoteliers learn more about their guests, while also consolidating the data insights they need to understand the total revenue from each guest, are also becoming a necessity.
With a range of pricing tools and revenue management system (RMS) solutions to consider, it comes down to rules-based recommendation tools versus analytics-based decision solutions. The former is a step above spreadsheets but requires time and effort to manage the rules and approve the recommendations. The latter, an analytics-based system like IDeaS G3 RMS, uses revenue science to understand how a hotel’s business behaves and automatically produces powerful decisions that manage pricing, rate availability and overbooking.
Emerging innovations in the hotel revenue tech space are now focusing not just on AI and machine-learning to advance demand management, pricing and inventory strategy, but also on adapting and addressing the need for both tools and solutions that fit the post-pandemic landscape.
F&B and other income streams are ripe with revenue potential but have been held back by the lack of forecasting technology. In fact, for many full-service hotels, non-rooms business makes up more than half of their total revenue, making it just as important as guestroom sales. Yet most hotel organizations are stuck forecasting F&B and other income streams with the oversimplistic approach of taking a previous period and tacking on a percentage. The resulting forecast is inaccurate and imprecise, resulting in higher costs from overstaffing or missed revenue from understaffing.
Revenue managers certainly know how painful budgeting and financial forecasting can be. In the past, it was necessary to spend countless hours collecting and preparing data in spreadsheets only to have a broken formula derail the entire process.
IDeaS RevPlan fills the automation gap with extensive intelligence to prepare the total revenue forecast. RevPlan’s power is the “one-stop-shop” concept that provides horizontal functionality, and expanded automated, scientific forecasting to multiple functions beyond rooms.
RevPlan allows revenue managers to create and maintain multiple versions of the operations forecast or budget to plan for multiple scenarios. It also helps them build an accurate forecast or budget for banquet and catering and by F&B outlet, assemble precise revenue forecasts and budgets for the entire business in accordance with fiscal policy, as well as plan and make staffing and purchasing decisions using an accurate and precise forecast. Furthermore, it instills an organizational discipline around forecasting and budgeting while gaining a holistic view of all revenue streams to increase profits with smarter planning and more agile forecasts.
Maximizing business revenues can be a beneficial strategy in the short-term, but optimizing profit is a long-term strategy that promotes lasting business success and growth within the organization. Focusing on all revenue streams and associated costs to better understand each individual guest’s value will help hoteliers determine who is most profitable and prioritize the type of business that delivers on that strategy.
IDeaS has developed multiple pricing approaches that fit both guest expectations and the technology stack. Continuous Pricing in G3 RMS, for instance, allows hoteliers to analytically price each room type optimally without rate tiers. This is done by defining the minimum and maximum rate for each room class. By analyzing demand and price sensitivity, it provides an optimal price within the configured range.
In conjunction with Continuous Pricing, innovations such as Agile Rates provide users with a simple and flexible way to dramatically enhance rate management and distribution, and most importantly, drive even more incremental revenue.
With Agile Rates, revenue managers can price key products such as advance purchase, packages, promotions, loyalty tiers and more by using advanced analytics instead of relying on the best flexible rate with fixed offset amounts or percentages. Trying to maintain these kinds of rate adjustments in a property management software and distribution systems takes a lot of effort and is oftentimes why they don’t get changed at all.
Finally, from a portfolio management perspective, one of IDeaS’ latest offerings is Optix, a module for G3 RMS that services the reporting and analysis needs of cluster and corporate revenue managers. The rolled-up data insights allows Optix users to see the big picture and recognize trends across multiple properties by building a smarter revenue strategy through filtering across clusters, segments, and rate codes.
Technology is the way forward
Hospitality has been fundament–ally changed in the wake of the pandemic. This new era of business requires an innovative approach to leadership, one that values insight and is informed by concrete data.
Some hoteliers are marketing rooms as work-from-home spaces to take advantage of the growing phenomenon. As this trend continues and the drive for employees to “work from anywhere” continues to increase, some companies are closing corporate offices. New group business models are filling the void as companies look to bring employees together for team meetings, and using a hotel’s function space to allow this is another way for the industry to increase profitability.
The hybrid meeting model is here to stay, at least for now. We’re seeing the rollout of subscription models with many brands launching some sort of day/monthly pass. Daily room cleaning is becoming an opt-in service and remote check-in/checkout technologies are solving some staffing challenges.
A connected infrastructure will put you ahead of the competition and provide your teams with an easy way to access, understand and disseminate the data. Many innovative models are emerging in the industry and conversations abound about the new use of space in hotels, particularly for M&E.
While the pandemic has provided further proof of hotel technology’s importance, forcing the industry to consider new strategies and tactics for recovery, innovative solutions continue to surface all the time. The trick will be keeping abreast of and identifying those that work best to solve your hotel’s challenges.