Hospitality continues to be challenged to respond to rising costs in new and creative ways–from how hotels are run to the packages and length of stay guests are booking.
Hoteliers are grappling with increases in interest rates and operational costs, and labor alone has risen to account for between 55 and 60 percent of total rooms department expenses.
Some industry analysts have speculated that the cost of labor has been the defining factor depressing hotel profits this summer, leaving operators with thin margins when they need to drive profitability and recover from ground lost over the past few years.
To help address the impact of labor costs on hotel revenue, savvy hoteliers have combined a push for revenue growth with the implementation of workforce management technology that helps improve worker conditions and lower operating costs however possible. In an important way, workforce automation and its impact on a hotel’s bottom line can be seen as an adjunct to its revenue management strategy – and, in certain ways, a driver of it.
The key is connecting Click here to enter text.intelligent automation to a variety of data sources with the speed to react in real time. Workforce management technology allows hoteliers to operate at a higher level with fewer staff members thanks to insights from data linked to revenue management directly from the hotel’s Property Management System (PMS). When intelligent automation has access to large data sets,hotels can automatically provide advanced scheduling capabilities, expanding worker flexibility.
Data plays a significant role in informing workforce management’s ability to influence hotel operating costs. It can demonstrate improvements in guest satisfaction scores and retain skilled workers longer if implemented correctly.
Labor First
Labor represents 40% of a hotel’s operating cost and is usually its most significant line item. According to the U.S. Bureau of Labor Statistics, compensation costs for civilian workers increased 4.5 percent for the 12-month period ending in June 2023 and increased 5.1 percent in June 2022.
Trends are beginning to converge across the industry, which now positions operators to use workforce management technology to better manage labor wherever possible. On one hand, hoteliers have a greater understanding of which elements comprise an effective tech stack, such as the ability to share information between departments and examine their findings for long-term trends. Operators now understand the value of this data exchange, and it helps shape a revenue strategist’s ability to understand guest demand or operational expenses and react in kind.
For example, when a hotel’s reservations system can communicate with workforce management systems, it’s possible to determine the most efficient staff levels for each shift in advance of guest arrivals. Operators with access to accurate analytics on the makeup of a hotel’s booking mix can make sure shifts are aligned with occupancy to avoid over and under-staffing. Workforce management systems also provide greater flexibility for team members when while giving managers the benefit of pushing open shifts and automating shift swaps to make sure the schedule always covers daily demand.
The era of unified systems enables revenue management technology to incorporate workforce management into its optimal operations strategy for the first time. Workforce management capabilities continue to expand as operators feed new data into the system, creating more accurate schedules alongside more clearly defined insights.
These technologies have already established themselves as components of a hotel’s success thanks to the insights they provide when parsing data for short and long-term trends. When applied to workers, their potential for operational improvement is nearly boundless. When a labor management system is used, hotels benefit from a consistent 6 to 8-percent drop in labor costs. These gains are even more significant when an operations management system automatically delegates tasks, leading to a potential 25-percent bump in additional productivity.
Knowledge is Power
Data-driven workforce automation tools were designed to reduce training time and turnover and produce a more profitable and efficient business model that serves guests and provides service excellence. Where revenue management technology helps hoteliers understand the acquisition costs of each guest, workforce management technology provides insight for hotels to address operational inefficiencies before they negatively impact revenue.
One way operations can leverage these insights is by improving communication between departments. With limited staff, face-to-face interactions with guests are invaluable, which makes it a challenge to balance guest service without sacrificing operational efficiency. Hotels across the industry have leveraged workforce management technology to instantly deliver guest requests to the right departments and prioritize activities without requiring direct interactions each time.
Improving the quality of a hotel’s guest requests, housekeeping, and maintenance tasks cannot be understated. Most hotels can provide work orders with varying degrees of detail and sophistication, but many of today’s operators rely on limited options via dropdown menus or pre-selected tags. Tasks also often lack photo or image upload functionality, limiting the tool’s ability to provide context for guest requests and maintenance needs.
Operators must reduce the time needed to deliver key information between departments. Improving workflows simplifies the sharing of information across the hotel and eliminates unnecessary losses due to inadequate service, errors, and operator response time.
Passion is infectious, and once operators have greater connectivity across their organization, it’s possible to further raise the bar regarding operational clarity, guest satisfaction, and worker fulfillment.
Speaking Their Language
The limited availability of labor has led operators to find new ways to increase accountability and transparency among team members, starting with workforce management technology. This also has an impact on a hotel’s ultimate profitability.
Operators with access to these tools can more easily take note of workers for recognition or areas of improvement. Still, more importantly, it allows operators to encourage and oversee improvements in worker performance without negatively impacting their team’s morale.
Delivering feedback to workers is not always easy, but it is necessary. Few among us are immune to the sting of criticism, whether we are rookie team members unwilling to be underestimated or seasoned veterans who carry the wisdom and burden of past lessons when managing present tasks. Workforce management tools allow operators to seamlessly guide their teams through adapting to new technologies or best practices through intuitive user interfaces, compliance alerts, and dynamically prioritized task management.
Hotel workers can use workforce management tools to keep track of their personalized list which keeps them on track and on pace with communication and relationships between workers. This technology creates an operational environment that supports self-corrective behavior and the willingness to learn new skills. It helps avoid direct managerial oversight by automatically delegating actions through alerts. Finally, it crystallizes a path for management to keep track of high-performing team members, assisting them in isolating workers for recognition, support, and encouragement when necessary.
Era of Flexibility
Another factor impacting hotels’ revenue mix is the changing nature of the hotel operational model – which relies ultimately on its success in best optimizing its workforce.
The unique aspect of today’s workforce landscape is the impact of the gig economy on workers, their schedules, and how they value flexibility. Gig jobs, such as delivery and transportation, are often associated with ultra-flexible schedules whereby workers decide their hours. This is managed by a series of complicated calculations within their host app, which determines rates based on the volume of demands compared to the volume of available workers, not unlike hotel revenue management technology.
Hotels are unlikely to replicate this employment environment in totality, but there are many lessons our industry can learn from the success of the gig economy’s scheduling strategy. Modern workforce management technology allows operators to staff their hotels in a way that makes sense for each property and team. It can help discern the optimal work mix for each hotel and team, but this is difficult to execute without access to an increasing number of data sources.
An optimal staffing mix exists for each hotel and each team, in theory, but such a mix is often elusive and impractical for operators to orchestrate each scheduling period manually. To do so, hotels must be aware of current events, the day of the week, projected occupancy, worker availability, and desired schedules. These variables can be effortlessly organized into a schedule that conforms to the needs of the hotel while satisfying worker conditions, as long as they are backed by analytics supported by real-time data and a powerful workforce management platform.
If hotels can create a stable employment system at the property level and reduce turnover, operators can fill more rooms, operate more consistently, and reduce losses to training and replacing skilled workers. Solving the labor crisis is directly related to saving hoteliers’ bottom line, as workers are the most impactful cost in hospitality. This remains a priority when optimizing and exceeding a hotel’s perceived revenue potential.
Workforce management tools make it easier for hoteliers to get work done. Breaking down those barriers creates a pathway to wider margins and stability hoteliers have been chasing for years. Hoteliers need to allow their analytics to reinforce the key elements of hospitality and create exceptional experiences between operators and guests. Furthermore, operators must also benefit from this exchange to feel fulfilled and reduce turnover.
Hotels are complicated ecosystems. They require a variety of skills and personalities to exist in one place and excel. Workforce management technology is leveraging access to data sources and intelligent automation to make sense of the industry-defining trends among guests and hotel workers equally. Its insights can improve worker and guest satisfaction and, therefore, profitability. Today’s technology is helping drive revenue by managing the people behind it better.
Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/.
About UniFocus
Unifocus is a game-changing workforce management platform that’s reshaping how the service industry tackles staff and operations management on a global scale. With a presence in over 1,500 properties across 43 countries and available in 26 languages, we’re at the forefront of revolutionizing the workforce landscape worldwide.
Our user-friendly platform hosts intelligent Staff Management tools that craft precise forecasts and optimized schedules based on a range of factors, including business demand and employee availability. By dismantling traditional workplace barriers, we equip managers with a comprehensive overview of crucial analytics and compliance alerts. This oversight leads to heightened productivity and cost-efficiency, all while keeping guest satisfaction and employee engagement as top priorities.
Employees benefit from our easy-to-navigate mobile app, featuring tools like Shift Genius for seamless communication and shift swaps, and the industry-leading Knowcross Task Management suite, streamlining various operations from guest services to maintenance tasks.
Discover the transformative power of a system where intelligence seamlessly meets convenience. Explore how Unifocus is revolutionizing the hotel industry at Unifocus.com, where innovation and practical solutions converge.
Check us out at UniFocus.com to learn more about the labor paradigm shift.
Corey McCarthy
Chief Marketing Officer
972-512-5100
Unifocus
