How can hoteliers balance an increase in travel with labor shortages?
The Covid-19 pandemic has naturally been a turbulent time for hoteliers. And, it seems all too often other issues are added to the mix, such as extreme labor shortages in the hospitality industry, growing customer demands and preferences, new variants of Covid-19. – the list is long. So the question remains: how can hoteliers deliver the best possible experience that guests will enjoy, recommend to family and friends, and even look forward to returning to the property?
I spoke with Tim Schuh, President of Digital Strategy at HGS, to learn more about how hoteliers can balance an increase in leisure travel while navigating a tight labor market.
Gary Drenik: This summer the travel industry was faced with both an increasing influx of customers and significant labor shortages. Can you detail what you see in the industry with regards to return to travel?
Tim Schuh: Although business travel continues to recover very slowly, leisure travel purchases during the summer are on the rise. Indeed, a recent Prosper Insights & Analytics A survey found that 23.2% of adults aged 18 and over planned to travel on vacation as a major purchase in July. As of March 2020, 22.6% predicted pleasure travel as a major purchase, which means we are above pre-pandemic levels.
This pattern has led hotels to make significant changes to their employee staffing patterns. For example, hotels operate with a reduced staff, with schedules weighted according to off-peak hours, including weekends. In addition to changing ways of working, hotels also face significant competition for workers as retail businesses, supply chains and quick service restaurants raise wages. Competition for labor and pressure on margins from wage increases have forced hotels to re-evaluate their day-to-day operations. Services are performed by fewer workers and based on customer demand, compared to scheduled services
Drenik: At the same time as hotels are experiencing staff shortages, they are also continuing to test the waters with new technology that automates some routine tasks. What are the new and emerging trends in this space that customers can expect?
Schuh: For now: From high-end brands to budget properties, rooms are only cleaned on request, cafes and cafes are closed, and towels and amenities are only renewed on request. This means that no hotel employee enters the rooms before departure, unless specifically requested by hotel guests.
So while there may be less human interaction during guest stays, hoteliers are striving to implement technology to continue to provide exceptional customer service. We are seeing at an increasing rate that establishments are building mobile apps to improve interactions with staff and to improve access to resources to resolve customer experience issues.
Drenik: Many customers choose their hotels based on their own experiences or those of others. Is there a “line” that hoteliers should not cross to maintain balance and ensure an optimal and personalized guest experience?
Schuh: In the past, consumers judged the guest experience by comparing a property to other local options, meaning hotel brands were judged against hotel property next to or down the street. This has led companies to develop brand promises based on a narrow hotel vertical.
However, the consumer is becoming more informed every day. The branded experience you deliver to a customer is now measured against the best experience anyone has ever had, which can range from staying at the Indianapolis Holiday Inn, the Nobu Hotel in Cabo, or even to a superior experience with a retailer. Is it fair to compare a hotel experience to buying a diamond at Tiffany’s? Maybe not, but this is where the market is going. This increase in customer expectations has challenged brands to re-evaluate emerging digital capabilities to serve customers.
In addition, hotels now face competition from horizontal competitors such as VRBO and Airbnb. Hotel partners must continue to disrupt the customer journey and the way they approach critical moments of truth, while still upholding the sacrosanct principles that define your brand promise. The Ritz-Carlton can automate and optimize moments of truth, but they will never cease to be “Ladies and Gentlemen in the Service of Ladies and Gentlemen”.
Drenik: Why is it important for hotels to take advantage of emerging technologies to improve the guest experience?
Schuh: With the recovery of business travel lagging behind leisure, hotels will have to continue to optimize their costs, without compromising on quality, in order to generate profits.
Emerging technologies such as chatbots, which can answer common housekeeping, catering and janitorial questions and requests, will allow brands to create smoother experiences. And by implementing chatbots, hoteliers are able to provide superior customer service with less work; allowing brands to remain competitive in terms of price.
But it goes beyond economics; today’s consumer accepts, and frankly prefers, a digital experience. This is why today’s emerging technology meets the customer where they would like to be met – whether by text, email, call or even via social media. Serving the customer in their preferred channel, with the ability to seamlessly switch to another channel if needed, will increase loyalty and increase revenue over time.
Drenik: How do you expect the travel landscape to evolve for the rest of the year?
Schuh: Over the next twelve months, we can expect overseas and business travel continue to come under significant pressure as consumers seek to stay in the United States. According to a recent Prosper Insights & Analytics survey, 79.6% of adults 18 and older who have vacation plans plan to travel within the United States.
Additionally, travelers will continue to emphasize safety in their plans and seek those memorable, frictionless experiences. As a result, businesses that embrace digital experiences will be in the best position to take advantage of customer demands.
Drenik: What is the opportunity for hoteliers to move forward?
Schuh: Mobile experiences are starting to become more mainstream, led by companies like Hilton and Marriott. Providing your customers with the ability to digitally interact with your brand will continue to become more important over the next 12-24 months. And in the next few years; Mobile experiences will become the norm, so brands need to actively embrace this new approach.
Personalization is another element; one of the ways for hoteliers to differentiate themselves is to create “virtual chocolate” moments. Why? Anyone who has ever had a chocolate on their pillow overnight while staying in a hotel or resort knows how memorable it is. It shows that the brand cares about you, knows you, and truly values your business. Hoteliers can use analytics that tap into a variety of data sources, including loyalty program information, to create guest stay experiences that are organized and tailored to their preferences. For example, the analysis could provide recommendations for indoor activities for children near the hotel based on the rain forecast, restaurant recommendations, a coupon code for the hotel spa, or a departure gift with the tea you drank during your stay.
Drenik: Thanks, Tim, for sharing your thoughts on this evolving topic. It was a pleasure!