The pandemic came and they left. No, we’re not talking about guests. They returned as soon as travel restrictions were lifted. This is about the staff. Dealing with understaffing in hotels might be the new big challenge emerging as a consequence of the pandemic.
Today, there are countless unfilled positions in the hospitality industry worldwide. For example, there are nearly 1.6 million openings in the United States alone, but barely any applicants to fill them. Things are similar in the UK and other markets.
This creates new challenges for an industry still reeling from months of lockdown, restrictions and uncertainty.
Unfortunately, there’s no single solution to the problem. But on the bright side, there’s one approach that can address several aspects of this issue.
An old challenge takes on a new dimension
Finding and retaining skilled staff wasn’t easy for hoteliers before the pandemic either. The hospitality industry has always had a comparatively high turnover, reaching nearly 74% in the US in 2016. The pandemic only made things worse.
During lockdown companies furloughed good employees or let go of entire seasoned teams to avoid going under. However, once hotels reopened and wanted to rehire, many former staff didn’t come back. Many of them have found jobs in other industries that demand fewer hours, offer more stability and better pay. As a result, 94.5% of hotels claim to be understaffed to some degree.
Impacts of staff shortages on hotels
Staff shortages negatively affect hotels in many ways. First, existing teams carry a heavier burden. They work longer hours, have too many tasks and may suffer from anxiety or burnout as a result. This leads to deteriorating service and a reduced offering (e.g. limited opening hours of dining venues). Once the guest experience suffers, a hotel’s reputation will begin to decline as well.
Even staff training falls short due to the lack of time which results in lower productivity, especially among inexperienced team members. Having to close venues or stop selling rooms is the worst-case scenario because you’re losing revenue despite demand.
Many hotels have recognized these challenges and attempt to win new staff through higher pay and better benefits. It’s a good idea to make your workplace more attractive this way. Be ready for your profitability to take a hit initially though, at least until productivity is back up and you can boost RevPAR.
Source: Hotel Effectiveness historical wage data, >5,000 hotels in the U.S.
It’s important to note that not all hotels are equally impacted by this problem. Around 5.3% of properties say they have no staffing issues. This begs the question: What do these less affected hotels have in common?
The answer is simple: these properties leverage the power of automation much more than their suffering counterparts.
Let’s see how that could look at your hotel.
Automation as the lifesaver for understaffed operations
The goal of automation is simply to save time on repetitive, manual, time-consuming tasks. In front office, this includes check-in/-out, sending confirmation emails, upselling and repeatedly answering the same questions.
Take online check-in as an example where automation can free up your team’s time and create a smoother guest experience. The system prompts travelers to supply their ID and credit card prior to arrival. Once they arrive, they only need to pick up their key from the reception. If you send guests a mobile key, you eliminate this waiting time, and they can access their room directly. This streamlines your guests’ arrival process and frees up your team for other tasks and more meaningful interactions.
“We see labor shortages at many hotels across Europe which is why we try to offer as much automation as possible to save our client’s time. For example, online check-in and payment automation drastically reduces manual tasks for receptionists. For this to work well, integrations are crucial. The PMS must connect to accounting and distribution systems seamlessly. We’ve already seen progress on this front. I would’ve also expected a quicker adoption of automated revenue management systems, but I’m confident this will come soon,” says Jan Hejny, Founder and CEO at Hoteltime Solutions.
Revenue management: the ideal department for automation
As Jan hinted in his quote above, the front of house is not the only place where automation can save time. Like many other back of house departments, revenue management has a lot of potential in this regard. Here, an automated system can reduce your workload by several hours a week and help you drive more revenue.
Let’s take a closer look at the main areas of revenue management you can automate:
1. Data collection and collation
The manual approach requires immense amounts of time and still doesn’t yield accurate, real-time data. You’re still forced to make pricing and distribution decisions with inadequate data sets. Often you miss out on revenue as a result.
An automated revenue management system (RMS) takes this task off your plate. It automatically collects internal historical and on-the-books (OTB) data as well as competitor and forward-looking demand insights in real time. This reveals live demand shifts and allows you to make prompt decisions based on the latest, most accurate data.
2. Pricing updates
Adjusting your rates manually takes a chunk of time out of your team’s day. Since they have many other tasks, they may only be able to update your prices well after demand has shifted. This can cost you revenue opportunities and may result in you filling up at low rates or outpricing yourself.
Again, an automated RMS speeds things up. It collects comprehensive data sets 24/7 and evaluates them to detect market shifts in real time. You immediately receive optimized rate recommendations whenever the RMS detects a change. Upon your approval, the RMS pushes the new rates into your PMS and distribution channels. No more manual updates needed!
Now, you can maintain optimal positioning and make the most of every opportunity. However, if you can’t review the RMS’ suggestions right away, you may still miss some chances.
Take things to the next level by adopting fully automated pricing. This is a completely hands-off approach where the system continuously updates room rates for you 24/7. It saves you the maximum amount of time and ensures you seize every opportunity to maximize room revenue.
Two real-life examples
Martin Duchateau, General Manager and owner of the Made in Louise hotel, got his property through the pandemic by using automation and modern technology to optimize operations and support his leaner team. Since fewer staff now handle a wider variety of tasks including sales, marketing, and revenue management responsibilities, efficiency has become more important than ever. The Atomize RMS played an important role in streamlining commercial tasks.
As Martin puts it:
“Our small team handles many different tasks every day. We want to spend as little time as possible with each tool and still get the maximum out of it. That’s one of the things we highly appreciate about Atomize. It automatically adjusts our room rates and captures revenue and pricing opportunities for us. Atomize has eliminated the tedious task of manual price setting and at the same time improved our RevPAR, a double-win.”
Faris Haitham from VESTA Hospitality had a similar experience:
“We’re a small and efficient team at VESTA Hospitality. From day one we’ve wanted to build a lean and efficient operation with the help of technology. This has proven to be a successful strategy in building a profitable business, even in pandemic times.”
“When my team started receiving price recommendations from Atomize, they were skeptical. Would someone pay $1,026 for a room when we used to sell it for $500? To our surprise, it worked. Now we trust Atomize and use its autopilot mode, so we don’t have to bother manually optimizing our rates. As a result, we’ve been able to handsomely lift our ADR compared to last year.”
3. Room revenue forecasting
Forecasting has become more challenging in today’s erratic markets where historical data isn’t as meaningful as it was. If you’re manually updating monthly room revenue forecasts, you spend lots of time collecting and evaluating data to make predictions. Despite your best efforts, forecast accuracy remains limited and a lot of it is based on gut feeling.
An automated RMS streamlines your monthly forecast updates. It uses your rates as well as live market, demand and OTB data to continuously update the room revenue forecast. Every time the market and your rates change, the system automatically revises its predictions. In short, your revenue forecast goes from static to dynamic. It’s also useful for your operations departments because it allows them to plan their resources and staff accordingly.
As you can see, the benefits of automating revenue management with a powerful RMS are numerous.
First, it allows your leaner commercial team to get more done with less effort.
Second, you can seize more revenue opportunities and boost your topline even in challenging markets.
This, in turn, gives you the chance to offer more competitive salaries and benefits to staff without hurting your profitability.
Are you ready to give this a try? Then get in touch with us to learn how Atomize can support you in these changing times.