As travel continues to recover, some airlines, hotels, restaurants, and event venues worldwide are struggling to keep up with demand due to labor shortages. And while labor shortages are nothing new, the pandemic brought about some fresh challenges, including the phenomenon of “revenge travel,” or the concept of consumers making up for lost time by booking more and longer travel experiences. The overall impact that this increase in consumer demand has had on labor within the hospitality industry has been enormous.
The State of Labor Shortages
Labor shortages are impacting businesses’ productivity, efficiency, and profitability across various sectors of the economy, but within the hospitality industry, hotels struggle to recruit and retain workers. According to a June 2023 survey by the American Hotel & Lodging Association (AHLA), over 80% of hotels are experiencing staffing shortages and 26% of those characterize them as severe. In Canada, two out of three accommodation businesses report that labor shortages are significantly impeding their business, according to the Hotel Association of Canada.
In Europe, there is a similar situation, where an aging workforce coupled with challenges attracting new, younger workers contribute to the issue. Labor shortages are impacting hospitality workforces in France and the U.K. too, where a lack of qualified workers has all contributed to significant labor shortages in this sector.
Impact on the Industry
The hospitality industry has faced difficulties in meeting customer demand and satisfying rising consumer expectations as a result of these ongoing labor shortages. With fewer workers, many businesses have had to reduce hours, limit capacity, or close specific business areas, leading to decreased sales. Hotels have needed to add temporary staff to handle daily operations such as cleaning rooms or checking in guests.
When businesses don’t have enough workers, the workload often falls on those who are available, leading to burnout, fatigue, and overall lower productivity. Workers are often stretched thin as they cover multiple roles, leading to potential errors, decreased efficiency, missed revenue opportunities, and a decline in the overall reputation of the business.
Finally, as pent-up demand for travel and leisure has grown, customers have become increasingly impatient and unforgiving when their needs are not met. A guest’s negative experience as a result of rising expectations can be difficult for a business to overcome.
Transforming challenges into opportunities
With so many complex challenges echoing throughout the industry, innovative solutions must be found by hoteliers in order to overcome labor shortages. Only by adapting to new realities can businesses not just survive but thrive in this evolving world.
Hoteliers must resort to innovative solutions that address labor shortages without overextending their resources. The key lies in leveraging existing infrastructures to optimize operational efficiency, rather than expanding into new avenues or overburdening their workforce.
The first step towards such transformation is to reimagine our traditional understanding of business operations and how technology can support them. Hoteliers must embrace the ‘thinking outside the box’ philosophy, seeking solutions that may not be readily apparent or traditional. This could mean reevaluating internal processes, experimenting with new operational structures, or seeking ways to increase efficiency.
Innovation & Automation: Critical to Growth
A key area hoteliers can look at when considering how to grow revenue is the use of automation and technology to increase guest satisfaction and loyalty, drive repeat business, and improve efficiency and productivity.
Service optimization solutions are designed to streamline and prioritize work so that teams feel more engaged and guests, whose evolving demands drive an ever-increasing focus on hotel service optimization, enjoy the most exceptional stays possible.
The efficiencies provided by service optimization software – automated hotel operations, reduced labor costs, and faster service speed – allow hotels to ensure an elevated level of service to guests through improved management of room inspections, housekeeping, scheduled maintenance, and more. The combination of a more empowered hotel staff and heightened levels of guest satisfaction can provide a hotel with the competitive advantage it needs to thrive in a world where human connection and collaboration remain at the heart of the hospitality industry.
By employing comprehensive marketing or operationally focused automation tools, hotels can address customer requests or escalations quickly, resulting in elevated guest satisfaction and return bookings. A central reservation system (CRS) can not only bring in more business through a hotel’s own website, but by ensuring more customized outreach and personalized offers before, during, and after a guest’s stay, it can help drive revenue and provide higher overall guest satisfaction.
Utilizing housekeeping technology can also help hotels automate operations and enable them to make more effective housekeeping-related decisions based on data and guest preferences. Ultimately this added efficiency assists workers in performing their jobs, leading to improved staff productivity and an enhanced guest experience.
Today’s sales and catering software and meeting distribution technology can also assist hoteliers who are focused on developing a group business strategy, by allowing them to gain insights into group reservations, performance, and revenue opportunities and more effectively manage group expectations.
A Path Forward
Today’s labor shortages combined with shifting guest expectations and changing market dynamics create a complex working environment for hoteliers. As the hospitality industry continues to evolve, finding new and innovative solutions to deal with these shortages will be crucial for hotels if they are to succeed in the long term.
Hoteliers can adapt to these changing dynamics in a variety of ways. By considering automating processes or utilizing technology to streamline operations, they can boost productivity, efficiency, and profitability. By making the sector more attractive to potential employees, they will be able to attract staff. And by ensuring that communication between departments is optimized, they can help retain existing employees, thereby delivering on the ultimate goal: enhancing the guest experience.
Download the complimentary Technology Investment Handbook to learn more about how purchasing technology solutions can help your property not just survive but flourish, today and into the future!
