High-Tech and High-Touch is the Only Way Forward in Hospitality | By Max Starkov

Total nonfarm payroll employment increased by 216,000 in December 2023, of these 52,000 were new local and federal government jobs, while the unemployment rate remained unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today.

This was the good news. The bad news? Right now there are 850,000 open positions in U.S. hospitality and leisure with NO TAKERS. Offering sign-up bonuses and poaching employees from your competitors is simply unsustainable since your competitors or their competitors will poach them back. From temporary phenomenon, labor shortages have become a permanent reality and hoteliers have to learn to live with it.

Whether hoteliers like it or not, the hospitality industry is moving from low-tech and high-touch to high-tech and high-touch. But what kind of high-touch? Fewer, well-trained and well-paid employees using technology to provide stellar service. Service, which currently the poorly paid and trained employees, overwhelmed by labor shortages and mundane, repetitive tasks simply cannot provide.

Last year hoteliers invested in technology less than 2.75% of room revenue (STR) - compare this to 15% of revenue for Expedia or Booking. Hoteliers need to understand that only through accelerated investments in technology - cloud, mobility, AI, robotics, IoT and other next gen technologies can the hospitality industry reduce staffing needs and unsustainable labor costs, and “appease” the exceedingly tech-savvy guests and their exceedingly high tech expectations.

By investing in technology, hoteliers can reduce, on average, their staffing needs by 50% and afford to pay their employees living wages, train them better and empower them to provide stellar service.

Three years ago I published an article “How Can Hoteliers Solve Labor Shortages Through Technology”. My thoughts from this article are still valid today.

Max StarkovNYU

View source