By Mark Van Amerongen
From payment securities and guestroom technology to amenities and even internal processes like revenue management, tech is everywhere throughout—and behind the scenes of—a hotel.
But how should hoteliers prioritize investments into technology? What pieces of technology have the biggest impact on the customer experience? Which tech investments come with the biggest risk versus potential rewards? And what tech truly improves bottom-line results?
These are tough questions, and hotel owners and operators who are on the front lines are grappling with these questions every day. And while definitive answers might not always be immediately obvious, knowing how to ask the right questions in the right way is an important first step.
Labor pains One of the largest issues facing us as an industry is the continuing rise of labor costs. And it’s not just wages and benefits, either. The entire cost structure is on the rise, from direct costs to the costs of acquisition, training and retention.
Making smarter decisions about technology can help push back against that in several ways. First, we can determine how tech can help directly ease labor cost pressures using artificial intelligence or other tech to essentially replace jobs that are getting harder to fill. Additionally, tech solutions involving hiring and scheduling can help limit expenses associated with overscheduling, unnecessary overtime and other inefficiencies. Finally, tech that enhances the guest experience, improves revenue management, makes marketing more strategic and effective, or introduces new operational efficiencies can help improve the bottom line across the board—offsetting increased labor costs.
Today’s toolbox The first and most obvious question is this: What tools can we use right now to more effectively manage labor on the front end? There’s a lot of frothy media coverage about exciting tech like keyless entry, but by far the biggest impact today is in business intelligence. Business intelligence platforms and solutions are integrating more variables, and getting more powerful and more sophisticated.
We’ve invested a lot in business intelligence platforms that allow us to predict business trends, from predicting demand to predicting the costs of commodities. The best tools today allow owners and operators to be more proactive and less reactive, with more targeted and accurate data not only about what’s happening right now, but what’s next. To take advantage of that, consider utilizing systems with the functionality to deliver notifications and push alerts in real time—GM phone alerts about impending overtime, for example—rather than waiting for after-the-fact reporting and analysis. World-class forecasting is critical, but real-time functionality can also save you real dollars, adding another layer of efficiency that every hotel should think about when deciding what business intelligence solutions work best for their property and their people.
You don’t always have to chase the shiny new toy. We’ve gotten feedback from our properties that it can feel at times like there are actually too many systems. With that in mind, don’t forget to make sure that these different tools and solutions need to play nicely together. Our primary platform interfaces with our labor systems, accounting systems, sales systems, hotel PMS software and STR data to ensure we are always looking at the whole picture. (STR is the parent company of Hotel News Now.)
Tech investing: Where and what? Cybersecurity and payment card security issues are obviously a priority. But once you’ve done your due diligence and are compliant and comfortable with your level of security, then you can move on to invest in tech tools that will help you effectively manage your business and improve profitability. Be systematic in how you make those decisions. Sit down and plan the next five years, making sure to prioritize, quantify costs, determine risks and budget strategically. Ask yourself: What’s essential? What can you afford? What are the biggest risks?
Determining costs by distribution channel can help your decision-making. On the guest side, keyless entry, automated text replies and apps with hotel information and convenient communication functionality are all desirable. But monetizing those features is trickier. Improving the guest experience is important, but there are always opportunities to be realized whenever you implement new ways of connecting with and communicating with your guests. There’s potential value in personal tech touchpoints in the ability to make strategic suggestions or provide subtle reminders of hotel extras and special events. Arguably the biggest priority for guests today is a great in-room tech experience. They expect lightning-fast, easy-to-use complimentary Wi-Fi, and they want their content available at their fingertips to stream from their phone directly to the TV.
Be practical Finally, recognize that you can’t have everything. You can’t do everything.
There’s likely to be a lot of people in your ear, from your customer service team, to your legal team, to the brand and customer base all saying: “you have to have this.” But these days you literally can’t afford to be indiscriminate—you have to be thoughtful. This is an area where you can’t think 30, 60 or 90 days ahead; you need to plan for three, five and 10 years down the road. Anticipate what the next generation will want, remind yourself that new technology is emerging every year, and think about which investments will pay off over the long haul. The one thing you can’t do is fall behind the industry tech curve and suffer a competitive disadvantage.
For an industry that’s fundamentally about human interaction, it’s ironic that technology has come to be such a big deal. But in today’s and tomorrow’s world, being strategic about how you allocate your tech investment resources is critical to the hospitality mission.
This article first appeared in Hotel News Now and is reprinted with permission of the author.