In the rapidly evolving landscape of the hospitality industry, technology has emerged as a transformative force, reshaping various facets of the business. Technology is having a profound impact on all areas of hospitality today, from IT to operations to marketing and beyond.
In the operations department, management companies and hotel GMs are turning to technology to solve perhaps their biggest challenge. Rising operating costs, particularly in labor and distribution, pose a significant threat to hotel operators. The struggle to find and retain qualified staff, coupled with spiking wages, creates constant pressure on the bottom line.
In the quest for streamlined operations and cost reduction, technology offers many tangible solutions. The adoption of digital tools across the entire hotel back office, from accounting to night audit processes, has proven instrumental in improving efficiency and reducing operational costs. With real-time data and streamlined reporting, hotels can reduce manual accounting processes and significantly cut down on the time-consuming aspects of back-office tasks.
Innovation in Hotel Operations
Technology has ushered in a new era of efficiency and productivity for hotels. One of its key advantages lies in the automation of processes and the elimination of manual tasks.
Recently, hoteliers have emphasized the importance of tackling rising operating costs directly. With wages experiencing a substantial increase, management companies are grappling with the need to find the right people, retain talent, and offset escalating labor costs. The quest for efficiency is constant.
Some areas of hotel operations that are being transformed by technology include:
- Housekeeping and Maintenance. Hoteliers are incorporating automation in housekeeping and maintenance tasks, including the use of smart devices and sensors to monitor room occupancy, trigger cleaning schedules, and optimize energy usage.
- Digital Night Audits. Automation in night audit processes enables night auditors to generate reports with a single click, automatically balance financials, and store information securely in the cloud.
- Data Analytics for Smarter Decisions. Advanced analytics tools help hoteliers analyze large datasets to make informed decisions. By understanding guest preferences, occupancy patterns, and market trends, hotels can optimize pricing strategies, marketing efforts, and resource allocation for greater efficiency.
- Mobile Check-in. Mobile check-in and digital key technologies streamline the check-in process, reducing the workload on front desk staff and enhancing the overall guest experience.
- Automation in Revenue Management. Revenue management systems use algorithms and data analysis to optimize pricing strategies based on factors such as demand, seasonality, and competitor pricing.
Flexibility has emerged as a key strategy for efficient hotel operations. Hoteliers are exploring innovative approaches, such as "gigging," or providing flexible schedules to line-level employees. This flexibility not only attracts and retains workers but also allows for seamless shift swapping among contract workers.
For example, Aimbridge Hospitality is actively working towards implementing gig scheduling across its portfolio, emphasizing the need to adapt to changing workforce dynamics, leadership said during The Lodging Conference in Phoenix in September. Aimbridge leadership stressed the importance of being more flexible in roles, allowing employees to work across various departments, and ensuring daily pay for enhanced financial flexibility.
Automation in the Hotel Back Office
The automation of back-office operational tasks is emerging as a crucial strategy to counter rising operating costs. Hoteliers can leverage technology to focus on areas that enhance efficiency without compromising the guest experience. Automation in accounting, finance, revenue, and marketing can significantly reduce the manual workload, allowing staff to focus on more strategic aspects of their roles.
Hoteliers can adopt digital tools to remove manual processes across the entire hotel back office, including moving to a paperless night audit and automating daily and monthly accounting tasks with real-time data.
Digital tools are transforming night audit processes, making reporting more efficient and reducing the time spent on manual data entry. The transition from manual reporting with multiple Excel sheets to automated, cloud-based systems is streamlining operations, making it easier to archive reports and ensuring quick access to information.
In the accounting department, automating Income Journal updates and bank and OTA reconciliation processes can save days of work at the end of each month and catch errors in OTA commission calculations.
Beyond operational efficiency, technology is redefining the guest experience. An emphasis on personalized experiences over traditional loyalty programs is gaining traction, with research indicating that efficient and frictionless experiences significantly influence brand loyalty.
Prepare for the Future
The adoption of technology in hotel operations represents a paradigm shift in the industry. As hotels strive to keep pace with evolving guest expectations, a greater reliance on technology becomes table stakes to effectively compete.
By embracing automation, fostering flexibility, and prioritizing the guest experience, hotels can position themselves for long-term success.
Jason Freed is a hospitality data evangelist at MDO.