IoT in Hospitality: Harmonizing Cost Cuts with Guest Service Enhancements

As the hospitality sector bounces back from the COVID-19 pandemic, the industry faces some tough challenges. Guests are returning to hotels as they start traveling for business and pleasure. Yet, hotels are grappling with staff shortages and the rising labor, utilities, and maintenance costs.

By taking a hard look at areas such as energy consumption, which accounts for approximately 6% of hotel operational expenses, and repairs to on-site equipment, which can take up to 60% of operating budgets, hospitality executives can uncover major opportunities to reduce operating costs.

Expense-related cuts in these areas are always welcome, especially as the industry aims to regain pre-pandemic occupancy levels. For instance, a 10% reduction in energy consumption has the same financial impact as increasing the average daily room rate by $0.62 in limited-service hotels and $1.35 in full-service hotels, according to EnergyStar estimates.

The more satisfactory a guest’s stay is, the more likely that guest is to return. However, reductions in operational expenses must not degrade guest services. If anything, hospitality needs to harmonize cost cuts with service enhancements.

An effective way to combine service enhancements with cost reductions is to leverage Internet of Things (IoT) applications. The hospitality C-suite is aware of IoT’s positive impact on business, which explains why 70% of hospitality executives have active IoT projects, far higher than a 48% average in other industries. Of these executives, most (53%) leverage IoT to operate more efficiently, while 33% are interested in modernizing their brand and adding new capabilities. IoT solutions enabled by low-power wide-area networks (LPWANs) are especially attractive to hospitality executives because they offer a lower total ownership cost than competing networks. Additional benefits of LPWAN solutions in hospitality include:

• Deep indoor coverage, requiring fewer access points across hotel campuses, which means it’s easier to implement and at a lower cost.
• Cost-effective outdoor use cases such as smart outdoor lighting, parking and irrigation can be easily added.
• Separation from the corporate network makes low-power deployments an added layer of security since anything connected to the corporate network is a potential point of vulnerability.
• Scalability benefits where more devices deployed mean higher value because there are many points of susceptibility that hoteliers could benefit from remote monitoring.

Guest Preferences

Guests, whether traveling for business or pleasure, want comfort and convenience. But they are also prioritizing travel based on a hotel’s sustainability practices. According to one survey, 85.6% are willing to pay more for an eco-friendly hotel. Low-power IoT technologies can aid your sustainability efforts, enhance the guest experience, and result in significant gains.

Take room lighting, for instance. Sensors can turn lights on and off based on whether anyone is occupying the room. It’s a simple energy reduction and management initiative that guests are looking for while also helping with your operating costs.

The same is true for temperature control in rooms. Sensors can automatically raise or lower temperatures based on occupancy. Room occupancy sensors can also play a role in housekeeping, alerting managers when rooms are ready to be serviced, as well as with utility management.

Operational Improvements

Another IoT use case in hospitality that impacts guest experiences and drives efficiencies is air quality monitoring, which continues to be top of mind because of the COVID-19 pandemic. According to the Centers for Disease Control and Prevention (CDC), good ventilation and air filtration can reduce the airborne concentration of SARS-CoV-2, the virus that causes COVID-19, and therefore reduce the overall viral dose to occupants. Guests want reassurances of clean air and look for compliance with government regulations and guidelines to minimize the spread of COVID-19.

IoT-connected sensors on HVAC systems help maintain the air quality in rooms by ensuring optimal equipment performance and enabling predictive maintenance. When sub-optimal ventilation or air filtration is detected, facilities managers are notified in real-time so they can remedy the situation before it negatively impacts air quality. In addition to maintaining air quality, these solutions can also extend equipment life through better maintenance.

IoT also plays a role in the quality and safety of food served in hotel bars, restaurants, and room service. Sensors on refrigeration units help prevent food spoilage by monitoring temperature to maintain optimal levels and streamline the temperature logging process for compliance audits. If temperatures fluctuate out of the optimum range, the monitoring system alerts a manager to take corrective action.

The preventive approach to temperature monitoring is also helpful in other areas, such as plumbing systems. Water from leaking pipes and faucets, clogged drains, and malfunctioning cooling units can cause severe damage to buildings and equipment. Directing staff to watch plumbing and cooling systems isn’t practical, or sometimes even feasible because of where they’re installed.

However, it’s possible to continuously monitor these systems with IoT-connected devices, such as flow meters, leak detection sensors, and shutoff valves. These devices can detect potential system vulnerabilities, send out alerts through wireless connections when something goes wrong, and trigger an automatic water valve shutoff to prevent damage – without human intervention. In a hotel with hundreds of potential points of failure, this capability can save a company high remediation costs and avoid revenue loss due to business disruptions.

Preparing for What’s Next

Investing in IoT solutions that help control operational costs, increase maintenance efficiency, take the burden off staff for routine tasks, and improve guest services is a good first step.

But the value of implementing IoT solutions comes from having an IoT platform that enables hoteliers to scale use cases over time to meet changing business demands or respond to regulatory changes. For example, increasing legislation requires employers to provide rapid response buttons for employee safety across the US. As a result, a rapid response solution to quickly locate employees in distress will likely become necessary. While hoteliers value staff health and safety — especially recently as many are operating with skeleton crews — the industry has been slow to adopt rapid response solutions. That's because many of the options in the market today are point solutions, which are costly to deploy and don't enable any additional value. However, with a platform in place, each use case that gets added delivers new value and ROI, reducing the total ownership cost.  

IoT is a real game-changer for hospitality companies looking to elevate their operations and services.

About Suresh Madhavan

Suresh Madhavan is Senior Director, Business Development and Partnerships with MachineQ, an enterprise IoT company within Comcast. In this role, he actively looks at new concepts, trends and business models that challenge the status quo of IoT—then identifies and expands upon external business relationships to uncover the next wave of disruption in the IoT space.