Workforce management software and predictive analysis point to an increasingly automated future as smaller workforces become a fact of life.
The recovery from the COVID-19 pandemic continues to expose the travel and hospitality industry’s lack of staff. Just as airlines are cancelling flights, some hotels are putting a limit on the number of guests they can accommodate.
Marc Dardenne, COO, Accor Luxury Brands Europe, commented: “Occupancy has been capped generally because of staffing. The UK has suffered the most because you had Brexit and Covid-19. Throughout all of our hotels, we are probably lacking at least 20 percent of our colleagues.”
Still, demand has been so strong for Accor’s luxury hotels that rates have shot up. Luxury is the first segment to get hurt in a crisis and also the first to benefit when business comes back, noted Dardenne, who looks after 40 European hotels under the Fairmont, Raffles and Sofitel brands.
“Overall, we have a seen a 20 to 30 percent increase in average room rates over all the hotels,” he said. “We are going to sell fewer rooms, hence we will obviously charge a higher rate and deliver the service. That was the strategy and it has worked.”
‘Revenge spend’ and pent-up demand have seen affluent travellers splashing out on afternoon tea, aperitifs, dinner, digestifs and then tumbling into the spa for some much-needed wellness.
Occupancy caps are a way for luxury hotels to maintain their service levels and protect their reputations, but are less likely to be deployed in the midscale and economy sectors.
For these hotels, huge spikes in summer demand can lead to serious challenges surrounding both service quality and employee burnout.
To manage housekeeping workloads, for instance, UK chain Premier Inn introduced a policy of only cleaning rooms if the guest makes a specific request one day in advance.
Higher wages have not succeeded in re-populating the hotel workforce. A rise in average hourly US hotel wages of 16 percent year-on-year to $17.10 still does not compare favourably with other industries such as retail ($19.20 an hour) that compete for talent, said a recent AGC Partners research paper.
Hospitality accounted for one third of all US jobs lost during the Covid-19 crisis. However, while the broader economy has recovered, most of these jobs have not come back. In Europe, there is a 22 percent shortfall in hotel staff, according to the World Travel & Tourism Council.
The hotel industry will likely need to adjust to having a permanently smaller workforce and seek solutions to streamline operations.
There is a limit to how much businesses can increase wages, but operators can do their best to offer schedules that employees actually want to work. Other incentives might include on-demand or daily pay, profit sharing, and paying attention to the quality of the work itself and the work environment and culture.
Cloud migration
The first priority for operating with smaller teams is to move on-premise property management systems (PMS) to cloud-based systems. Once this is done, a range of labour-saving solutions are possible.While housekeepers and chefs cannot perform their tasks from home, there are other hotel employees who can, at least some of the time.
Flexible and remote working should be adopted where possible. One obvious time-saving advantage of cloud-based operating systems is that staff can perform tasks, access data and generate reports from anywhere and at any time.
Other key labour-saving technologies include contactless check-in, guest messaging apps, staff scheduling and collaboration platforms, and various other business intelligence tools.
Covid-19 has made hoteliers understand the true economics and workflow efficiencies of digital and cloud-based systems. Concerns around replacing the PMS ‘heart’ of hotel operations have abated. However, on an industry-wide scale, cloud migration is a big project that will take several years to complete.
“There are still plenty of hoteliers running their hotels from on-premise legacy technologies, which puts them at a serious disadvantage,” Tristan Gadsby, CEO, Alliants, said.
For younger employees especially, having to struggle with out-of-date operating systems makes daily work frustrating and results in them leaving.
“Having to grapple with archaic technology is simply not on the agenda for digital natives who have grown up with a smartphone in their hands. It’s hardly surprising that, when put in that situation, they vote with their feet,” added Gadsby.
Vibhu Gaind, CIO, RBH Hospitality Management, is two-thirds of the way through the process of migrating the group’s 45 UK properties to the cloud. His absolute priority when choosing a new PMS is ease-of-use and a system that new employees can learn within hours rather than days.
Speaking at IHIF 2022, Rami Zeidan, founder and CEO of Life House, said that his business had solved its labour turnover problems by building its own software. He claimed his system was so easy, he could literally “pull someone off the street and teach them in a few hours.”
Modern, easy-to-use operating systems, therefore, have several labour-saving benefits: simple and quick onboarding processes, the automation of routine tasks, and pleasing user-interfaces that aid employee retention levels.
Workforce management software
Increasingly, hospitality businesses are turning to AI-powered workforce management software (WFM) to help with their HR challenges.
It is estimated that inefficient labour schedules can result in businesses spending up to 25 percent too much on payroll. Schedules that do not give employees enough advance notice or flexibility are also a key source of job dissatisfaction.
In June 2022, WFM provider UniFocus became an approved vendor to IHG Hotels & Resorts. WFM uses algorithms to analyse occupancy, employee availability, compliance, and other business influencers such as the weather and local events, to accurately forecast staffing volumes.
Christian Urbat, head of owner solutions, IHG Hotels & Resorts, said: “Using UniFocus’ array of solutions, each of our locations can effortlessly staff according to projected demand and not just by the day but by the hour, maximizing productivity for each department area.”
Unifocus CEO Moneesh Arora added that its solutions give team members enhanced shift flexibility: “With many of today’s employees basing their continued loyalty to an organisation on the ability to achieve a greater work/life balance, our software notably allows them to select the shifts they would like to work.”
In 2019, CitizenM teamed up with Quinyx, another WFM provider. Rosters are now primarily made by algorithms that automatically choose who works when. Although this may not sound very democratic, Quinyx claimed it has led to a better and fairer distribution of morning versus night shifts, more consecutive days off and longer shifts; in short, more schedule security and more room to plan their personal lives around work.
5-Out software is a restaurant optimisation tool that pulls in a range of data to generate labour and cost of goods sold (COGS) forecasts two to three weeks in advance. Since restaurateurs typically like to keep their labour costs to around 18 to 20 percent of sales, the machine learning tool predicts optimal labour requirements on an hourly basis.
As is generally the case with AI-powered forecasting tools, however, there is a question of trust. Do operators trust the algorithm?
5-Out’s founder and CEO, Branden McRill, said: “Our clients are the algorithm’s editors. We write the story and they make the adjustments. The machine learning model is learning so it’s becoming more accurate over time. We build trust over time. We can also give managers a two-week look back to check accuracy.”
Gus Malliaras, owner of Detroit Wing Company, a fast-growing restaurant chain, said: “The insights that 5-Out sends are easy to follow and have saved us $2,000 per store in the first month alone.”