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Understaffed and Overworked in Hospitality: Is Automation the Answer?

Companies are beginning to recognize the opportunities that lie with developing “phygital” solutions for hospitality businesses that drive revenue, streamline operations and improve the customer experience.
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No industry has been hit harder by the labor shortage than the hospitality industry. According to the U.S. Bureau of Labor Statistics, there were about 1.7 million accommodation workers employed nationwide in June, a roughly 16% decline from June of 2019.

For hospitality operators, the loss is tangible. In a recent survey, the American Hotel & Lodging Association Foundation found that 97% of hoteliers are experiencing a staffing shortage, with 50% saying it's severe.

Over the past year, we’ve seen a hint of what labor shortages could mean: longer lines, higher prices, shorter hours, and sometimes even permanent closures. Nevertheless, pent-up demand for hospitality services is reaching new highs, with that same report stating that 60% of American adults say they’re more likely to take a vacation now than in the previous two years.

With workers seemingly gone for good, hospitality businesses are left wondering how they can service this increase in demand while maintaining a great customer experience. For many, the answer lies in technology.

To accommodate the labor shortage, hospitality businesses have made several operational changes, including limiting hours of operation, reducing capacity, increasing prices, and limiting services (such as housekeeping). However, these changes negatively impact the customer experience and are not sustainable in the long run.

Meanwhile, self-ordering technology such as kiosks fill these service gaps while driving incremental revenue. Kevin Jacobs, CFO and president of global development, Hilton, stressed the importance of “phygital” technology that blends digital experiences with physical ones. “These offerings will help make the customer’s experience better,” he said. 

Companies are beginning to recognize the opportunities that lie with developing “phygital” solutions for hospitality businesses that drive revenue, streamline operations and improve the customer experience. One Embassy Suites location leveraged the “phygital” solution to help implement a self-ordering kiosk to take orders at their famous omelet breakfast station.

Implementing the technology at the omelet station completely transformed the way that customers order at Embassy Suites. Instead of waiting in line to place their order verbally, customers now have the ability to place their order immediately at the kiosk without having to wait in line.

According to franchise operator Joseph Steiskal, “Customers enjoy the intuitive, easy-to-use interface and photos. Using the kiosk, customers can take their time and explore all options free of judgment. Orders are always accurate because the customer input it themselves, and the process is quick, seamless, and efficient.”

Now, Embassy Suites can run its business more efficiently with fewer full-time employees, all while more than doubling throughput and eliminating bottlenecks. By automating routine tasks, hotels can reallocate employees to more useful functions of the business and save on their bottom line.

In addition to the omelet station, hotels are using kiosks for a variety of services including check-in, concierge services, in-room ordering, service requests, mini-mart checkout, and more. Kiosks always show up, don’t call in sick, and are ready to work 24/7/365. In this way, kiosks serve as an excellent solution for the operational challenges presented by a lack of front-of-house staff.

Kiosks also minimize human contact, eliminate ordering errors, and allow businesses to implement integrations, such as loyalty programs and discount codes, that reward consumers. Many of these solutions provide businesses with an opportunity to capture data intelligence about consumer history, including most recent orders, to execute suggestive selling and communicate more efficiently with the consumer.

Self-ordering technology drives incremental revenue through customized upselling technology. Research from the Harvard Business Review shows that consumers spend on average 12%-20% more when they order with their eyes and with touch from a self-ordering device than when ordering from a cashier.

Implementing automation to work alongside employees can also help retain your existing staff, and repurpose them to other essential functions of the business, thus maximizing labor. In other words, automation allows you to run your business with fewer high-quality employees that can be compensated more.

The labor shortage shows no sign of letting up; for operators in the hospitality industry that want to not only survive but thrive in this new labor landscape, the only answer is automation.

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