Behind the automation boom coming to the hotel industry, from 24-hour check-in to texting for towels
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Hoteliers have not invested in technology in years. But, there are persistent labor issues that force a reckoning within the sector.
Mark Haley of Prism Hospitality Consulting said that the labor issue was a major driver for technology investments. The company specializes in marketing and hospitality technology. It is impossible to hire enough employees. … I’d submit that most hoteliers are doing the same today. [labor]It is far more important and worrying than the pending slowdown in economic growth.
Hoteliers are currently reporting strong bookings despite increasing room rates. Thank leisure travelers. These people are so excited to be out and about, they don’t seem to mind paying higher prices. According to industry forecasts, hotel revenue per room (a critical industry indicator known as RevPAR) will probably surpass pre-pandemic levels in this year.
Latest, published by STR and Tourism EconomicsThe NYU International Hospitality Industry Investment Conference, this week, forecasts that while hotel occupancy will not exceed 2019 levels but average daily rates will rise by approximately $11 compared to the previous forecast.
While the outlook does not foresee a recession occurring, it doesn’t anticipate that the slowdown in the economy will cause travelers to change their travel habits. The outlook predicts that business travel in 2019 will be even more popular.
“It is kind of cold that in recessions, 70% to 80% of the population doesn’t get it. Haley explained that people are still getting regular incomes and still travelling.
The strength of business travel is a long-standing driver for hotel spending. In April, the American Hotel & Lodging Association and Kalibri Labs projected that hotel business travel revenue will be 23% below pre-pandemic levels this year, which is a loss of about $20 billion from 2019. According to the AHLA, business travel revenues fell by $108 billion between 2020 and 2021.
PwC forecasts that business traveler growth will offset any decline in leisure demand next year, as per PwC’s May projections. It expects average daily room rates would be up 16.9% in 2022RevPAR increased by 28.1% over the previous year. RevPAR could rise by 6.6% in 2023 due to increased occupancy and higher room rates. That would mean that it would reach 114% of its 2019 level.
According to hotel managers, guests will likely notice big changes when they return to their hotels. They include a higher reliance upon technology that is frequently being used to alleviate the effect of staff shortages.
More guests should have the option to bypass the front desk to check in at their room via an app or kiosk from their smartphones. OracleSkift is a travel trade publication. a survey of 633 hotel executives this spring and nearly all — some 96% — were investing in self-service technology at their hotels. 62% also said that contactless services will soon be most commonly adopted technology in their hotels.
Marco Manzie is the founder and President of Paramount Hospitality ManagementThe company, which owns five Orlando-based resort and hotel properties, stated that technology is a necessity because it can lower costs.
Manzie explained that the current leanness in the economy has caused many hotel owners and managers to take a backward step and reevaluate ways they could improve their bottom lines.
Inflation hasn’t been this brisk since December 1981. The Bureau of Labor Statistics reported Friday that the Consumer Price Index rose 8.6% in May due to rising energy and food costs. These costs are affecting hoteliers in many ways, including the cost of food and fuel to heat or cool buildings as well as the wages paid.
Manzie indicated that he is currently in the process to roll out contactless checkout and kiosks for ordering food and drinks at the properties he owns. It is still in its early stages, so he cannot yet reap the savings of reduced labor costs.
He stated, “I am able to tell you that the budget for the year was set up for labor cost savings and anticipating saving.”
Most large hotels had been using contactless technology for guests since before the outbreak of the pandemic in 2020. Industry consultants stated that Covid helped accelerate the adoption, and it is now the cost to enter.
Alex Alt (senior vice president at Oracle Hospitality) stated that many hotels had been looking for these changes in a 1-to-3-year period. He said that the Covid strike accelerated many hotels’ timelines to within one-to three months.
Alt stated in an email interview that hotels experienced a decline in staff, as well as an increase in customers’ safety and health standards. This created a need for all hotels to automate their hospitality experiences by giving guests the ability to control their stay from their smartphones.
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One reason it is so popular among guests. Skift and Oracle surveyed 5,266 people. Their survey found that 73 percent of them are more likely than others to prefer a hotel offering self-service.
The majority of guests wanted to be able order room service using their smartphone or send a text message to get more towels delivered up to their rooms. They would also like to be able to connect seamlessly to their gaming or streaming accounts from their in-room TV without remembering their passwords.
Alt also stated that customers want the freedom to choose from a variety of hotel options and pay only what they need during their stay. He said they are prepared to pay more to have a personalized choice, such as selecting a particular room or floor. It is similar to what consumers can do when purchasing airline tickets.
According to the Oracle survey 40% of hoteliers believe that the unbundling model will be the future in the sector.
This is a significant change from how hotels currently recognize their revenue. They need to be more modern. [enterprise resource planning]Alt explained that ERP systems will be adaptable to these changes.”
While he did not provide any forecasts, he stated that the hotel industry is making substantial investments.
However, some systems used in hotel technology are outdated. This is especially true for independent hotels. You can find out more at www.in. an articlePublised in Hospitalitynet by Max Starkov of New York University, Max Starkov stated that hospitality companies can spend as little as 2.5% on their net room revenues for IT and staff benefits.
Darin Yug (PwC U.S. Gaming Consulting Leader) has noticed a stronger focus on back-office system updates.
He stated that there hadn’t been much attention given to the back-office and said companies had to do some catch-up. However, even that investment is being motivated in part due to labor shortages, he stated.
Yug stated that talent search isn’t just for those who clean your hotel rooms or run finance operations. It’s about improving the employee experience by giving them better technology and better tools.
Scott Strickland is the chief information officer Wyndham Hotels & ResortsAccording to Wyndham, small-business owners who franchise Wyndham hotels brands such as Wingate, Ramada, and Days Inn have two options for property management.
“We made the foundational investition [to standardize]Strickland explained that we are able to offer a superior service, which is a major advantage over our competitors.” This means some services that are more associated with luxury hotels can be offered to the more affordable brands of hotels.
Strickland stated that being able to achieve this at an economy hotel is a great accomplishment. It allows a bus of soccer players to return to a Super 8 hotel to use the self-service check in to get to their rooms faster, which builds loyalty.
Wyndham franchisees have the option to opt in to its reservation system. This routes customers to a central call center where they can book a hotel room. Wyndham stated that the system offers a 15% to 20% premium in rates for the 4,000 participating hotels. Strickland stated that hotel managers are free to concentrate on their guests and other tasks, such as cleaning the rooms, while not being distracted.
Wyndham still looks for ways tech can be used to reduce the stress of labor. The company is currently piloting cashless tipping, where housekeepers can tip staff members by simply scanning the QR code located in their room using a smartphone. Strickland reported that Wyndham has already seen an increase of tipping.
BeneThe cashless tipping provider, X, claims that clients enjoy an average $4.50/hour increase in staff pay and 30% more staff retention.
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Strickland explained that guests who don’t have enough cash often find it difficult to tip.
Chatbots, machine-learning, artificial intelligence and facial recognition are all being considered by many hotels to help them run their properties safely and efficiently with fewer staff. Alt from Oracle says that these technologies can be particularly useful in dealing with more routine requests. This allows staff to concentrate on meaningful, one-on-one interactions.
He said that these types of technology will prove crucial as the hotel industry faces a shortage of labor as it heads into busy season.
Sharan Pasricha is the co-CEO and founder of Ennismore lifestyle hotel company.
Pasricha said that “The hotel industry operates on an extremely archaic tech stack.” He also explained how many hotels are just now moving to the cloud for their property management.
Pasricha has always tried to create custom applications by having in-house product engineers and software developers. Pasricha’s main focus was on improving the booking process. He drew inspiration form features found in the ecommerce industry which he believes is more innovative than the hotels industry.
I couldn’t understand why people would take a cookie cutter that was boring and poorly designed. [third-party]He said that booking engine was a great way to show you care about your physical experience and all the details in your hotel are authentic and original.”
Through his efforts, more guests booked directly through the Hoxton website. This boutique hotel brand is owned by Ennismore. Pasricha estimates that approximately 50% of all direct bookings come from this source.
Flexy Time was also possible thanks to this feature, which allows guests to check out or in to a room at any time, instead of waiting for an established time. Pasricha stated that guests won’t need to spend five hours in the lobby after landing on red-eye flights.
Flexy Time poses a more logistical and operational problem, but has allowed Hoxton to stand out from other hotel brands. The system asks guests what time they plan to arrive, and when they want to depart.
He said, “Having control over the technology allows for you to have these innovations and iterations, which has, for us, earned a lot loyalty among our guests.”
Ennismore is currently expanding Flexy Time’s 14-brand portfolio. This includes, among other things, the Scottish hotel Gleneagles and So/. This joint venture is the company. AccorFrench hospitality brand,.
Wyndham is also looking for unique ways to differentiate itself with its investments. It launched its first website two weeks ago. a road trip planning featureThe app offers route suggestions and the ability to create trip plans. Strickland also stated that it is making investments in electric vehicle charging stations.
For companies looking to create loyalty among their customers, mobile apps can be a great tool. Companies can use the data they collect to improve their future offerings and services.
Alt. said that while it’s impossible to know what inflation will do to the industry, Alt. believes the pandemic spurred a “new level of appreciation” for the modern systems.
He said that while innovation might slow down, hotels understand there are no turning back for these consumer demand and must adapt to the new technology.