In an increasingly competitive hospitality industry, hoteliers now face a new quadruple threat- inflation, higher interest rates, labor shortages and brand property improvement programs (PIPs). It’s yet another perfect storm for the hospitality industry. But what are some ways to combat these new pressures on profitability? Here are three strategies that can help:
1. Leveraging Technology to Streamline Contact and Increase Guest Experiences
The use of technology in hotels has not yet evolved to provide the right level of experience for guests or hotel staff. Automation can become beneficial in streamlining contact points between guests and staff while also increasing overall guest experience. Now that Gen Y and Gen Z represent a majority of travelers, the demand for contactless check-in, self-service markets and streaming videos in guestrooms has increased.
We found that the key is not to use technology to replace entire staff positions, but rather carve out specific tasks that allow staff to put more time and emphasis on the areas which require human interaction. All departments within a hotel can contribute by utilizing technology. Here are some examples:
- Front desk and concierge service: During my last hotel stay, I received daily texts asking if everything was okay and if I needed anything. Unfortunately, there wasn’t any direction on how the sender would help. That is better suited for a conversation, where an effective text would include links for ordering fresh linens, a room service menu, or other specific assistance.
- Engineering: When you walk past an indoor pool, you smell the chemicals as they waft through the air. That smell comes from the manual process of adding chemicals to rebalance the pH of the water and remove bacteria. Technology exists to gradually add chlorine to the water and eliminate the swings in pH, saving money on chemicals as well as staff time.
- Housekeeping and Rooms: Now that housekeeping is an on-request service, it doesn’t have to mean that the request must be made directly with a staff member. A site where guests could enter their room number (or link through their phone), select the products needed, and preferred delivery time would help streamline delivery of those products and allow staff to schedule their time whenever possible.
- F&B and order/payment processing: In both restaurants and retail, there is a growing trend toward self-service ordering and payment, so why not at hotels? It will reduce waiting times as staff focuses on product availability and delivery of the products rather than creating lines of guests waiting for service.
2. Reimagining Common Areas with New Revenue Generators
Hotels should look at how they can reimagine common areas within their properties as potential revenue generators. This includes creating “experiential retail” such as lobby markets and pop-up shops or partnering with local boutique venues and service companies for events or activities that generate income for both parties involved. Rather than having guests leave to find solutions, bring the solutions inside your hotel. It could not only generate more engagement by guests, but also allow local residents or workers to discover what you have to offer, which could lead to more referrals from their friends and coworkers who come to visit and need a place to stay.
Hotels should also explore different opportunities on how they can monetize common spaces such as offering yoga and fitness instruction with certified local trainers that could have an online scheduling program to ensure guests can gain access while still allowing times for local to take advantage of the service. A revenue sharing model can be used to benefit both your hotel and the service provider.
3. Reviewing Level of Supplier Engagement & Reporting
Generating revenue isn’t the only way to optimize your NOI. It is equally important to review your supplier relationships as they relate to efficiency and profitability of providing you with goods and services. Even if you are working with a group procurement company or other third-party supplier management companies, maximizing those supplier partnerships can often lead to cost savings or even additional revenue opportunities. If you are working with service providers, it is critical to have a well-defined scope of work, one where you can imagine the end result and be able to judge the actual result against your expectations.
Additionally, suppliers can assist in providing information on general retail trends related to their products, whether it be around food, wellness, sustainability, or other trends. Having detailed reporting and analytics around emerging guest behaviors and preferences will allow hotels to better evaluate their current offerings so they are able to meet the changing needs of their guests more effectively and remain competitive in the marketplace over time.
Being proactive in addressing these four threats facing hospitalities today – inflation, higher interest rates, labor shortages and brand PIPs – is an opportunity for hoteliers not only survive but thrive in this constantly changing landscape. By leveraging technology to streamline guest interactions while increasing guest experiences; reimagining common areas with new revenue generators; and reviewing supplier engagement and reporting, hoteliers will be better equipped manage costs while improving customer experiences all at once.
iDEAL Hospitality Partners Group identifies widespread needs and opportunities for revenue growth in the hotel industry and seeks out problem-solving and solution-minded suppliers, technologies and services that fit the bill for hoteliers. Owners and management companies are savvy in adopting new revenue generating and guest-satisfying technologies much more so today than ever before. Andy Haynes, the Vice-President of Growth at iDEAL says, “we meet with supplier companies constantly that are eager to provide best in class products within the hotel industry, and we coach them on serving the hospitality sector. We ensure there is a true revenue generation component, or that the product is satisfying a guest demand, so that the supplier company can truly help hotels be more efficient, offer the right products, and increase their bottom line.”
While there still needs to be a strong human element throughout the hotel, leveraging technology correctly helps bridge the gap between customer satisfaction, staff efficiencies and hotel profitability. Taking advantage of every square foot of the hotel and finding creative revenue generating options is a key focus for many hotel executives and associates. Maximizing and optimizing supplier relationships and group purchasing contracts keeps hotels on a long-term path for driving efficiencies and profits. One thing is clear – now is the time to take full advantage of all possibilities for growth.