Balancing labor & guest experience is key to profitability

In today’s challenging hotel workforce environment, employee retention is of the utmost importance. It’s up to the managers on and off the property to create a positive working environment for their employees, since it’s the team members who make the guests feel at home and provide a quality stay.

In a recent Hotel Business Hot Topics session, “Optimal Profitability: Balancing Labor & Guest Experience,” in partnership with Unifocus, moderator Glenn Haussman, founder/host, No Vacancy Live podcast, and industry leaders Moneesh Arora, CEO, Unifocus; Ben Campbell, president/CEO, Hospitality America; Jason Kreul, COO, First Hospitality; and Ben Perelmuter, president/COO, TPG Hotels & Resorts, discussed how hoteliers must focus on both the guest and employee experiences to remain profitable.

Hausmann began the session by asking how important camaraderie and building relationships with employees are to a productive workplace.

“If you want people to work hard, you’ve got to connect with them,” Kreul responded. “My rule, especially when I was a GM and working with our associates and team members on the line, was whenever you interact with an associate, don’t just connect on whatever business things you have to connect on; always know one personal thing that was happening in that person’s life. And you try to connect on that as well.”

The employee experience has changed over the years, however. No longer does a free group lunch work as an employee engagement tool. Today’s hotel employees need to know their boss cares just as much about them as they do about the guests.

“As a leader, you have to genuinely care about people, and if you don’t, you’re in the wrong business,” said Perelmuter.

Campbell agreed, adding, “If you want to give genuine experiences to our guests, we need to be trying to provide genuine experiences to our employees. We have to treat our employees as human beings so that there able to do the job for our guests.”

Most leaders are spending more time with the people at work than with their own families, noted Kruel, so they should “treat everyone like they treat their loved ones at home.”

Arora moved the discussion to the guest experience and said that hotels need to get managers in front of their guests rather than sitting at a desk in front of a computer.

“I think it’s important to free up the manager and get them away from a screen and away from administrative tasks so they have that genuine connection with their employees and their guests,” said the Unifocus executive. “That’s what the use of technology should help us with, as opposed to replacing any sort of interaction.”

AI to the rescue
Perelmuter agreed, noting “AI will play a role in that, and it’s playing a role already at a large, full-service property in Orlando where we’re using AI to answer the phones and generate text messaging to guests that check-in and checkout. It takes an enormous amount of pressure off of not only the management but also the staff. It’s about shifting resources to the guest, and also balancing the labor component because we have to manage the margin.

There are other areas in the hotel to look for efficiencies but nothing that’s facing the guest. Utilizing AI with any technology will take mundane tasks away from those associates and keep them in front of the guest.”

Kreul pointed out that AI can be used as a tool to improve workforce management.

“We still have a long way to go, but AI can help with predictive scheduling, taking into account employees’ days-off requests, their desired days that they want to work and the shifts they want to work,” he said. “That could take the scheduling responsibility out of the manager role. If it can help us with having a productive and engaged workforce and a highly engaged customer, the better off we’re going to be.”

Arora believes the training process can be aided by AI tools.

“We have a lot of people enter this industry from different backgrounds,” he said. “We need to give them confidence, skills and training, and it’s hard to do that in this type of environment where you’re always active. So we have to use technology to give them the training so that they can have confidence on the job. Part of retaining people is giving them that confidence in those skills. I think that’s another thing we could do to make the job more satisfying and rewarding for people and retain them longer.”

Training tools will allow hotels to bring employees up to speed on several tasks around the property,” said Campbell, adding that cross-training “gives our employees more awareness around what’s happening throughout the hotel in other departments and offers that different perspective to a front-desk agent or housekeeper, so they see the whole picture of what the business is and why a general manager is asking them to do a certain task,”

Still, certain AI functions are emerging slowly in the industry, and some hotel companies, including First Hospitality, have taken it upon themselves to create their own platform.

“We don’t yet have a tool that just tells us, ‘Hey, you better look at these four properties today because labor is trending in the wrong direction, and we see a trend coming,’” said Kreul. “We have to find that ourselves. I think we’re on the verge of creating that tool, and we’re experimenting with that a little bit in our proprietary system at First Hospitality called First Analytics. We’re not there yet, but, we’re getting there.”

Data processing
For Cambell, it’s about understanding where the data is coming from and it can be controlled.
“Where AI is going, we have no idea, but we do know what data AI is going to make decisions off of,” said the Hospitality America CEO. “My concern is what is happening with that data and how I can centralize that data so that when AI does catch up, we’re making better decisions on the back end. We’re going through the process today of bringing in the data, probably into a Microsoft environment, so that their AI tool will then be able to learn and help us in making those decisions.”

Once that data is parsed, AI will produce actionable insights that hoteliers can use, according to Arora.

“AI is a large language model and thrives off of data,” he said. “As an industry, we need to get our data in order so that it can be informative, because we’re going to move from these large language models to large action models so that AI can tell you, ‘Hey, here’s the data. And now I’m telling you, these are the actions you should be taking.’ But in order to get that output, you need that large language model to be informed.”

Perelmuter noted that the brands have the data that will help hotels create a tailored guest experience, noting, “Many of the brands have heat maps, where, if you log into their portal, you can see different color codes where certain rooms that have routine guest complaints should be sold later than other rooms. So the information and the data is there, including guest-profiling data. Before a guest comes to the desk to check in, there’s data already on the screen that shows what room type they like, what their preferences are for F&B, etc. And it’s about taking that data and interfacing it with some piece of technology where you can, for instance, say to an Alexa device, ‘Tell me what room is the best for Mr. Jones, who’s checking in today at 3:00 p.m.’ Then, the device is going to respond, ‘Put them in room 551.’ That’s how I see AI evolving.”

As AI and other technologies evolve, the industry needs focus on what’s to come rather than what happened already, said First Hospitality’s Kreul, adding, “We talk about what RevPAR index was last week. We talk about how our P&L was last month. We’re just never focused on what’s about to happen. We’re not seeing around corners. I don’t think that we’re programmed yet to think in those terms, but I think that’s where we’re going to be in the next few years.”

Labor technology
In response to a question about using technology to take into consideration what employees need so that they find the job satisfying, Arora responded, “The traditional way of managing labor of saying, ‘OK , here’s your schedule’ doesn’t work today, and you’re going to turn away a part of the workforce. Imagine being able to say, ‘Use your iPhone, download our app and tell us the days that work best for you because you have childcare issues. Do you have other issues? Just block those times out.’ We will use our automation, machine learning and algorithm to take all these data points and figure out how we get 50 people into this schedule so 80% of their requests are accommodated and will work through the other 20%.”

He continued, “The example I use is: If you’re going to get in a car to drive across the city, you’re not going to use a paper map, and you’re not going to call the police station and ask for directions. You’re going to use Google Maps or something like that. It’s going to take all these inputs, variable, dynamic inputs, traffic accidents and time of day, and it’s going to constantly recalculate the optimal map for you, and you’re going to make changes. It’s the same thing with labor, and that’s the technology that exists today, but we’re not using it. That’s what would help solve these types of employee issues that directly impact retention.”