July 19, 2024

Wake-Up Call: How Staffing Shortages Spell Opportunity for Hoteliers

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During the pandemic, around 70% of all hospitality workers in the United States were laid off. While travel volumes have largely returned to their 2019 levels, much of the industry’s labor force has opted not to return, choosing other opportunities and career paths instead.

The severity of this issue has been highlighted in several reports. The Bureau of Labor Statistics found that in 2022, accommodation and food services had the highest churn, quit, and job opening rates of any other industry in the US. In an eye-opening survey by Deloitte, over half of hotels say that they have between 25% to 75% of the workforce they had pre-pandemic. What’s more, only 63% of hoteliers expect to return to 2019 staffing levels by 2030.

This can only mean one thing: A dramatic and lasting change to the hospitality workforce that will likely impact your long-term hiring prospects. It’s challenging not just to find employees but to find skilled staff that are right for the job. This may become even harder as younger generations dominate the workforce, discouraged by industry perceptions of low pay, long working hours, and limited career advancement opportunities.

Many hotels—upwards of 70%, according to Deloitte—have had no choice but to lower their available vacancies and amenities, unable to stay sufficiently staffed. Inflating your rates can also help offset reduced occupancy and meet rising wage demands. However, these factors can all damage customer satisfaction and impact your bottom line.

Rather than waiting out the labor market, forward-thinking hotels are seeing this shift as a chance to leverage smart technologies like AI, robotics, and cloud computing. Nearly two-thirds of European hoteliers plan to double their tech budgets in the next year. In the US, half of hotels are adopting innovation to bridge the labor gap. Technology is bringing significant change to the industry, helping address labor shortages while improving guest experiences—and potentially even changing how the industry is viewed by up-and-coming professionals.

Industry experts agree that hotel labor shortages are here to stay. The good news is that this issue is driving innovations that support hotel profitability and resilience now and in the years ahead.

Innovations promote efficiency without compromising guest satisfaction

What exactly do innovations look like for hotels? Perhaps the most obvious application in addressing the labor shortage is to help staff do their jobs more efficiently. In the back office, hotel professionals can transition from manual, spreadsheet-based, and paperwork-heavy systems to automated, cloud-based software. For example, property management systems (PMS) centralize information across various hotel functions, from reservations to billing and housekeeping. This gives employees easy access to consistent, accurate information, while AI-powered PMS can generate insights about guest behaviors and automate routine tasks.

Furthermore, revenue management systems use sophisticated data analysis to optimize pricing strategies based on factors such as demand, seasonality, and competitor pricing. This allows hotels to maximize revenue while operating with limited staff. The same approach can be applied to PMS schedule management, using historical data to ensure optimal staff coverage when it’s needed most.

Technology can even be used to address the hiring process itself. Automated recruiting tools often use AI to find suitable job applicants, while chatbots can perform early applicant screening. After hiring, e-learning platforms and virtual reality support employee onboarding and training.

When it comes to guest-facing activities, chatbots and virtual assistants can alleviate agents by responding quickly to customer requests. Similarly, mobile support and in-room devices allow guests to request services without needing staff support. Hardware, such as robotic vacuums or drones, can even alleviate housekeeping staff and automate room service deliveries.

Aside from streamlining understaffed operations, these solutions have the added benefit of creating more personalized guest experiences. Consumer preferences have changed significantly since the pandemic, with almost half of travelers preferring novel experiences more than they did in 2019. Hotels need to give guests more value for their money—especially as room rates increase—and meet expectations for mobile options and digital connectivity. Even in understaffed hotels, technologies can achieve this by:

  • Supporting mobile check-in and digital key technologies. These not only reduce front desk workloads but satisfy increasingly tech-savvy guests.
  • Using AI-powered PMS and other hotel systems to analyze guest history and behaviors. This is an effective way to suggest personalized amenities or local attractions with a minimal burden on agents.
  • Installing smart room management systems, such as voice-controlled assistants, smart thermostats, automated lighting systems, and other IoT devices. These can add an extra level of personalization for guests without requiring human interaction.

Hotels can boost value and foster a more promising workforce outlook

These innovations are empowering hotels to become more operationally efficient with fewer workers. This frees up hotel staff to focus on more nuanced tasks that improve customer experiences and loyalty, driving revenue over time. Nearly 60% of the hotel general managers surveyed by Deloitte anticipate automation to improve guest experiences, and, in turn, their bottom lines. As more hoteliers adopt solutions like AI, the industry will most likely see a significant return on investment, even if staffing levels remain stagnant.

Aside from revenue growth, technology can help hospitality providers revolutionize their approach to hiring and retention. By facilitating more efficient operations, tech-integrated hoteliers give workers a more enjoyable, stress-free work environment that encourages long-term hires.

Technologies also provide more professional development opportunities and attract new talent—especially younger professionals who may not have previously considered hospitality a tech-forward industry. While hotel innovations may mean that hotels have fewer hiring demands in some roles, they will also need to think about hiring strategies for software engineers, data analysts, and other professionals needed to design, implement, and manage new tech solutions.

Historical Bureau of Labor Statistics data confirms that even before the pandemic, hospitality was notorious for higher turnover rates than other industries. Tech investments are key to transforming the hotelier’s purview from one of a traditional customer service employer to one with exciting, innovative career prospects. Perhaps even more importantly than short-term gains, this can promote more stable staffing levels, reduce operating costs, and generate more value over the long term.

Address labor shortages proactively with a property management system

The hospitality industry is experiencing a time of unprecedented change as labor shortages persist amid evolving customer demands and economic uncertainty. Hoteliers can choose to either view this environment as an uphill battle or seize it as an opportunity to innovate and differentiate themselves from competitors. Digital transformation streamlines understaffed operations while giving guests more value during their stay, improving loyalty and revenue growth. In the long term, adopting a technology-forward culture can also help hoteliers attract and retain talent, avoiding labor gaps altogether.

Solutions such as AI and cloud computing are seen by hotels as having the most potential to improve task performance across a range of hotel functions, from guest processing to staff management. If your hotel is in the market for new digital technologies, a cloud-based property management system is a strategic place to start, helping consolidate and automate hotel operations in a single view.

Infor Hospitality is an industry leader in PMS software, helping hotels automate routine tasks, facilitate recruitment and onboarding, optimize staff scheduling, and support guest self-service technologies. As more hotels adopt PMS to gain a competitive advantage, it’s a prudent investment your business can make to navigate a volatile labor market and improve guest loyalty for years to come.

About Infor

Infor Hospitality is dedicated to helping industry leaders create a scalable technology platform to unite locations and empower their teams, developing powerful multi-tenant cloud software for hotels, casinos, and restaurant organizations. We work with customers and integration partners in over 135 countries to help them achieve strategic clarity, operational efficiency, consistently superior guest experiences, and maximized revenues. In a constantly evolving industry, our customers are empowered to meet today’s challenges and be ready for future ones. Visit Infor.com

Aaron Stein
Director of Marketing – Global Hospitality and Service Industries
Infor



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