Solving hospitality industry labor shortage through hotel technology
HospitalityNET World Panel Topic
With travel demand accelerating rapidly, the hospitality industry is experiencing a new challenge: labor shortages resulting in sharply rising labor cost, which consumes as much as 60%-80% of RevPAR (CBRE). In the U.S. alone, hotels need to hire 600,000 more employees by summer to be able to meet demand (BIS.gov). Right now there are 171,800 open positions on LinkedIn for hospitality jobs in the U.S.
Wages in hospitality operations – frontline hotel staff positions such as housekeeping, front desk, wait staff, line cooks, etc. – are up more than 20% since April 2020 (Hotel Effectiveness). Hotels and restaurants alike are offering sign-up bonuses, higher wages and even cash payments to candidates just to come for an interview. In the same time productivity is down due to influx of inexperienced staff, since many of the experienced hospitality professionals left the industry due to furloughs and layoffs during the pandemic.
The question is, how can the hospitality industry solve the current labor shortages and unsustainable labor cost through hotel technology innovations, automation, mobility, robotization and next gen hospitality technology applications?
It is not as much about the replacement of manpower as it is about enabling your existing workforce to achieve more in their job roles and the operation generally.
When demand for accommodation is greater than supply generally a higher rate is charged for a room. This is sustainable apparently. When the demand for skilled hospitality labour is greater than supply, higher rates of pay to attract talent in a traditionally underpaid industry is unsustainable? I digress.
The purpose of hotel technology has always been process optimization. Do more with less. Move at the speed of data. The impetus for the adoption of technology has not changed since pre-pandemic. Perhaps the motivation for adoption has and this is the magic bullet that will see a pendulum shift for the industry…..
I tend to take a broader view that a proactive approach to exploiting technology as a practice in business alleviates the challenge of being caught short and needing to scramble. I also take the point of view that it is not as much about the replacement of manpower as it is about enabling your existing workforce to achieve more in their job roles and the operation generally. This translates to an increase in product or service quality. Usually well received by the paying customer.
It is an industry imperative as we move forwards that job roles will need to change and underlying business platforms will need to become broader in their functionality to support better job design. Such labor shortage pressures on industry have been growing for 15 years and are not going away. If anything they are becoming more acute as this example demonstrates.
Great technology exists and has existed. Hotel technology needs to be managed as an asset of the business to ensure the full advantage is gained for operational and financial performance. In my view this is an aspect of business acumen that needs improvement in hospitality.
TRAVHOTECH reviews a year of dialogue and opinion through contributions to HospitalityNET’s World Panel topics in 2021. We’ve been pleased to able to offer our thoughts and experience on several important topics through our participation in the World Panel in 2021. Viewpoint first published on HospitalityNET Worldpanel for Information Technology in June 2021.