By Adam and Larry Mogelonsky
Budget season is upon us, and 2023 is offering up quite a few question marks as to where to allocate resources. Protecting the bottom line is a perennial goal, but it’s hard to do with rising wages and labor shortages that force hotels to throttle service offerings. The following is based on past client work on the ground with full service hotels and resorts, looking specifically at initiatives that can drive cost savings or topline growth without proportional labor requirements.
To start, we advise you to put yourself in the guest’s shoes amidst the recovery of Summer 2022. Rates were yielded through the roof and yet service often fell below 2019 delivery standards. We would say that this is a one-off situation, but many are forecasting that labor issues will persist well into 2023, so we cannot simply wait for the times to change.
Instead, we recommend you start with some tried-and-true old school hospitality practices that we’ve seen work tremendously well. Three examples include a short welcome note delivered in-room upon arrival, a thank you note in the room the night before checking out and a bounce-back coupon attached to the guest’s departure folio offering an upgrade or booking discount bonus for the next stay.
The Opportunity Cost of Automation
The future of hotels goes hand in hand with technology. But bean counters being bean counters, from our experiences one of the biggest obstacles to rapid innovation and tech deployment to resolve labor issues is some form of cost or breakeven analysis. While we would never advise against performing an exercise of this manner, hotels really need to speed things up.
Why? Because of the ‘opportunity cost’ from not innovating. By this we mean the rather nebulous figure encapsulating everything from guests who book elsewhere because you took too long to respond to an inquiry through to staff members who are caught up wasting time crunching numbers when that task can be digitalized for greater team efficiency.
Technology offers tremendous potential for elevating the guest experience without adding to your staffing component. Today’s customer is virtually glued to their mobile device. In several properties that we have visited since international restrictions eased, a welcome note appears on our mobile immediately after check-in both greeting us and asking if there was anything that we needed.
As an example, with today’s customers exceedingly mobile-first, not only do your communications need to be fully responsive but you can’t really do it without some AI workflows to assist your lean team. Managed through a trained machine learning platform with support from live agents and escalation protocols, these programs not only improve service levels, but also free up associates to personalize service in other areas. Without an AI ‘filter’, someone who have to reply to all these messages, often missing many which would result in ‘abandonment’ and lost revenue. The longer you wait to deploy tech, the more revenue that’s already gone.
Your goal should always be to embrace the guest before they arrive at your front desk. Apart from understanding their time of arrival and mode of transport, using proper automated communications you can encourage additional revenue through prepurchase or prearrival reservation of ancillary services such as dining, spa, golf, activities or room amenities. Upselling platforms that can do this are now readily abundant. Rather than looking at this as a merely value-added sales opportunity, most guests will appreciate you identifying both the availability as well as the opportunity to simplify their arrival by making these reservations in advance because ultimately you are saving guests time (convenience) which is what really matters.
Treat Your Employees Like Your Guests
The days of looking at your staff as expendable are over. Consider the concept of opportunity costs through the lens of recruitment. If you have a high churn rate, that’s more time and money spent trying to find candidates then train them. Any strategic planning for 2023 must consider employee wellness programming, staff meals and other teambuilding initiatives to ramp up retention. While this may seem costly upfront, the alternative is an inability to drive ancillary spend due to lack of staff, higher wages needed to incentivize retention and stymied brand equity due to middling corporate culture.
Often, it is the little things that count. Yes, every hourly staff member on your team would immediately accept a substantial raise. That is clearly not a financial option. More plausible are several smaller initiatives that can go a long way towards creating an environment that reduces turnover and motivates team support for your guest-enhancing activities. Set a luncheon aside each month for birthdays. Announce the celebrations, provide a cake with small gifts. Significant work anniversaries should be both announced and celebrated with a more formal event where spouses are invited. Here, gifts should reflect the individual’s desires, possibly selected from a gift catalog. Support your team as you would your family.
While we’re addressing employee satisfaction, your back of house deserves some attention. When was the last time that you entered your property through the service entrance? Does your BOH experience mirror the FOH? What is the level of cleanliness? How cluttered is it? Is there any natural light or revitalizing live plants? When was the last time it was painted? Remember, your team is conditioned through the environment of their workplace. Respect them and the respect will carry forward through their workday.
Still on the topic of BOH, your employee cafeteria needs attention. When was the last time you had a meal there? Better yet, why not hold your next executive committee meeting there? The days of greasy fries and burgers are over. Healthier food options will be appreciated not just for the long-term health of your team, but they will benefit in the short-term by improving moods, nullifying any refined-sugar-induced postprandial slowdown and improving immune systems to reduce sick days.
Some Other Tips
Beyond the two key areas of ‘teams and tech’ that we’ve delivered keynote speeches on, here are some other pointers that may or may not apply depending on your category or brand:
- Analyze the aggregate of your reviews as often there’s that one big thing – like a noisy HVAC or insufficient bath towels – that is the 80/20 of your bad reviews
- Everyone eats and nearly everyone drinks coffee in the morning, so look at ways to add a bit of panache here like offering a full range of dairy alternatives during breakfast service or partnering with a local roaster
- Breadbaskets at the restaurant have gone away since the pandemic, which makes them ripe territory for reinvention and dining differentiation
- Locally authentic goes far beyond F&B, but key throughout is to frame all recommendations or partnerships through the notion of ‘guests being incredibly busy’ whereby it’s your job to make things easy to find, book, buy and experience