Technology

The real impact on guests when hotels reduce service |

Outsourcing hotel voice channels may be the wisest decision to deal with high labor costs and labor shortages.


Travel Outlook CEO John Smallwood-5.10.2022

Labor costs have skyrocketed over the last decade. After the pandemic, labor shortages have plagued companies around the world, and the hospitality industry is no exception. Worker demand is higher than ever, but a universal labor shortage continues, causing problems for hotels despite the surge in travel.

Two years have passed since the pandemic. The trip is back a lot. All hotels are preparing for a record summer trip, but due to the recent labor shortage, they are preparing with one hand tied behind them.

Hotels are struggling to float in these unprecedented times as wages rise and workers’ supply declines. Hotel operating costs directly affect the profitability of the property. So it’s no wonder that labor shortages and rising costs are at the expense of them. Continue reading below to find out the actual impact of rising labor costs on hotels and their guests.

Impact of operating costs on profits

Hotel operating costs directly affect the profitability of the property. Wasted spending depletes profit margins and threatens the financial condition and long-term survival of real estate. Hotels need to find a balance between overspending and sacrificing significant services that negatively impact the guest experience.

Sure you get what you pay for in terms of labor and service, but given the new high labor costs, hotels have to find new ways to reduce costs without impacting the guest’s experience. It will not be.

Revenue management

The first step in managing hotel operating costs is to practice good revenue management. Instead of managing revenue with older models based on fixed-price systems, we adopt models that more accurately reflect today’s dynamic markets.

The core of this is Yield management “Consumers to strategically use performance data, local market data, competitor rates, and other applied analytics to optimize pricing and distribution in a way that maximizes revenue and profits. It helps you predict demand. ”Simply put, sell the right room to the right guest, at the right time, at the right price, and at the best cost through the right distribution channel.

Dynamic pricing allows hotels to manage their bottom line in today’s ever-changing economy. Use flexible pricing for your product or service based on market demand. In the dynamic pricing model, companies charge more as demand increases.

Labor shortage and new high labor force

According to the data provided to Labor cost trends in 2020Labor costs and related costs have been reduced by more than 50%, offsetting a nearly 60% reduction in total revenue. The total labor cost of the previous year was more than 50% of the hotel cost by GOP. In short, reducing operating costs was an obvious solution to minimizing the loss of hotel profits.

Now that the lights are on at the end of the tunnel, the hotel is aiming to return to full operation. But the new high labor costs hinder their ability to return to normal.

Impact on guests

Kimberly Berry, Director of Digital Business Development for Travel Outlook

As travel continues to grow, hotels will be required to maintain the required staffing after being reduced in 2020. The hotel will soon reopen and compete with some of the services and facilities that were removed in 2020, in addition to the sharp increase in occupancy. Justify the increase in room rates.

“If the hotel can’t find a solution to the shortage, it’s hard to serve the guests who expect a high level of customer service when they return to travel,” said Digital Business Development Director. Kimberly Berry says. Travel outlook. “That is, guests can experience long wait times on phones, front desk phones, and stretched, narrow concierge departments.”

Given the high labor costs, and the wisest decision you can make to deal with labor shortages, is the hotel’s voice channel. Premium Hotel Call Center Leverage next-generation hospitality-specific technologies to help staff focus on their valued customers.

Only industry-leading hotel call centers can address recruitment and staffing challenges immediately. This includes answering up to 60% of front desk calls, answering property-specific FAQs, understanding multiple languages, routing calls, sending follow-up text, and more. And do it at a reasonable price.

Are you ready for the next generation of voice bots specifically designed for the hospitality industry? Learn how AI-powered virtual hotel call center agents can do Improve hotel voice channels while saving fixed labor costs..

A veteran of the hospitality industry, John has owned, developed and managed hotels for many years. After earning a BBA from New Mexico State University, he began his career at AT & T, gaining valuable insights and experience early in the data revolution. His experience in technology and hospitality Travel outlook, World-class hospitality contact center. Recently, with the creation of ExpressRez, the premier contact center in the bed and breakfast industry, Visit Virtual Hotel Agent ™, Bella ™The first AI-equipped voice bot for the hotel industry.

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