How to solve labor shortages through technology

With travel demand accelerating rapidly, the hospitality industry is experiencing a new major challenge: labor shortages resulting in sharply rising labor cost in the U.S., which consumed as much as 87% of RevPAR (CBRE) in Q1, 2021. Total labor costs in the U.S, as percentage of total hotel revenue, jumped from 37.4% for the period April 2019 – March 2020 to 60.5% between April 2020 and March 2021 (HotStats).

In the U.S. alone, hotels need to hire 600,000 more employees by summer to be able to meet demand ( As of mid-May, there are 171,800 open positions on LinkedIn for hospitality jobs in the U.S.

Hotel Effectiveness reported that wages in hospitality operations – frontline position such as housekeeping, front desk, wait staff, line cooks, etc. – are up more than 20% since April 2020. Hotels and restaurants alike are offering sign-up bonuses (Marriott is offering US$1,000), higher wages way above US$15/hour, and even cash payments to candidates just to come for an interview.

At the same time productivity is down due to influx of inexperienced staff, since many of the experienced hospitality professionals left the industry for greener pastures due to furloughs and layoffs during the pandemic.

In my view there are two ways for dealing with the acute labor shortages and unsustainable labor cost:

  • Pay up: Continue to offer sign-up bonuses, higher wages and interview cash payments, making profitability even more elusive, or
  • Invest in technology to solve the current labor shortages through technology innovations, automation, mobility, robotization and next gen technology applications. The goal here is to do more with fewer employees by using technology and reduce your staffing needs by a significant percentage compared to 2019 levels.

Accelerated investments in technology are also necessitated by the exceedingly tech-savvy guests and their exceedingly high technology expectations. Gone are the days when hotels offered “a home away from home” with comparable technology amenities. Unfortunately, many hotels nowadays offer “a subpar home away from home” experience as far as technology is concerned.

So how can you reduce your staffing needs through technology? Here are just a few suggestions that are geared toward independent hotels, small and midsize hotel brands, though most are equally valid for major hotel chains – the opportunities are endless.

1. Pre-Arrival

You start your staff reduction long before your guests arrive at the property. The goal here is to try answering in advance all possible questions potential guests might have about the property and its surroundings, position your hotel as the best choice in the destination and steer travel consumers toward making the booking.

2. Website and booking engine

Review or hire an outside consultancy to audit your property website and booking engine. Why does the quality of the website and booking engine matter? If we put aside the value of much-needed direct bookings, having a good website and booking engine significantly reduces phone calls or email requests to the property.

The issue with calls or emails is that when people call or email, someone at the property has to pick up the phone or manually reply to the email. Analyze why people are calling the property. Is it to make reservations? If yes, then perhaps your property’s website and booking engine are not doing an adequate job. If it’s for information about your property’s location, services and amenities, perhaps your website technology and content need a serious overhaul.

Here are some features you should be on the lookout for:

  • Website: Does your property have a mobile-first website? If you don’t, with 70% of today’s travelers visiting hotel websites via mobile devices, some will call or email your property to get information and book, most will choose an OTA or a competitor.
  • Is your website powered by best-of-breed Content Management System (CMS) technology, allowing you to update the visual, textual and promotional content 24/7 and create unlimited content pages and sections calendar of events, promotions and landing pages?
  • Do you have a personalization engine on the site to provide customized content and custom-tailored offers based on the user demographics, feeder market origin, browsing behavior, membership status?
  • A virtual concierge on the site like Alice App or Alliants to answer questions about the destination, the property amenities, events and happenings?
  • How about a user-friendly, state-of-the-art website booking engine to guide the user through a frictionless booking process that results in significantly increased sales of rooms, packages, promotions without human assistance?

3. Chatbot

A chatbot on the property website like Asksuite engages users, answers all of their questions and steer them toward making a booking. Chatbots provide users with information through text, images, video, audio, etc. and serve as your property’s 24/7 virtual customer service department. Edward, the chatbot of Edwardian hotels in London, responds in real-time and round-the-clock to inform on hotel services and amenities, make recommendations, handle customer complaints, etc., thus relieving the workload of the front desk.

4. CRM technology

After the booking is made, your efforts do not stop there. Using CRM technology you continue the “automated conversation” with your booked guests: from reservation confirmations, pre-arrival messaging with useful information like weather during the stay, events and happenings at the property and in the destination, customized upsells and upgrades based on the RFM Value or membership status of the guest, etc. The CRM technology automates the pre-arrival conversations with the guest, provides information and answers to important questions arriving guests might have and relieves staff from having to answer phone calls and emails.

5. Mobile check-in

Mobile check-in achieves four objectives:

  • Provides contactless experience preferred by the majority of today’s customers
  • Reduces significantly the number of front desk personnel needed to check-in guests
  • Optimizes the utilization of housekeeping staff
  • Allows you to generate, in an automated fashion, additional revenues via upsells, upgrades and cross-sells.

All major cloud PMS platforms and third-party vendors offer mobile check-in applications.

Many of the travel consumers’ tech expectations are around self-service, so let’s give the DIY-obsessed consumers what they want. There are several mobile check-in functionalities that can save significant labor costs and generate revenues you should consider:

  • Housekeeping: When checking in – whether via mobile app, message or email link, self-service kiosk in the lobby or via the front desk – the arriving guest should be able to choose 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. This allows better planning, scheduling and utilization of your housekeeping staff and in many cases leads to significant reduction in costs.
  • Ideally, the mobile check-in application communications should feature AI-powered upsell and upgrade technology to generate much-needed additional revenues.
  • Mobile keys: All traditional hotel lock hardware vendors offer mobile key versions. Vendors specialize in retrofitting lock hardware with BLE (Bluetooth Low Energy) or barcode technology. Most vendors are capable of sending mobile keys in advance as part of the mobile check-in process. 
  • Room selection: Look for PMS or third-party applications that allow your guests to select an available room from a digital floor plan of your property. Travel consumers are already accustomed to choosing online airline seats, movie theater seats, opera seats, etc. So, why not hotel rooms?  This can be a great way to generate additional revenue: You want a room away from the elevator? It’s US$10 more. A room on a higher floor? US$20 more. Upgrade to a suite for US$50? I am convinced room selection will become the norm within the next few years. Enabling advance room selection and mobile keys is a great way for reducing the need for front desk clerks.

Optimize labor using the best hotel technology to fit your needs.

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