In the fast lane: The top 8 reasons hospitality is marching fast toward automation in 2024

Hotel manager talking to woman at the front desk

March 29, 2024By Joe Vargas | SVP and General Manager for Hospitality

Note: This article first appeared in Hotel News Resource.  

2024 marks the shift to automation as hotels, venues, and restaurants march fast toward new technologies to transform guest experiences and reduce costs. From mobile apps and self-service kiosks to AI-powered platforms, automation is becoming ubiquitous across hotels, restaurants, and travel businesses.

Recent surveys show that over 80% of hospitality operators are integrating automated systems to streamline operations, reduce human error, and optimize performance. This move towards automation is driven by a convergence of factors—changing consumer preferences, labor shortages, rising operational costs, and the need for enhanced efficiency.

With the proliferation of smart devices and always-connected guests, consumers increasingly expect highly personalized, seamless experiences when they dine out or stay at a hotel. At the same time, hospitality businesses are grappling with rising labor costs and not enough people to fill open positions. Automation presents a way to do more with less while also delighting guests.

As we detail below, forward-thinking operators are embracing automation as the new imperative to remain competitive. Automation allows businesses to streamline operations, curb expenses, gain insights into guest needs, and provide top-notch services. The hospitality industry is marching firmly into the era of automation, and the winners will be businesses that leverage technology to transform the guest journey.

1. Evolving guest expectations

Today's consumers have high expectations for seamless, personalized service and interactions during their hotel stays and restaurant visits. Guests want technology to enhance their experiences, not detract from them. They expect service providers to know their preferences and past interactions. Guests want mobile apps, self-service options, and automation that allow them to customize and control their experiences.

According to recent surveys, over 80% of guests want a more personalized stay experience enabled by technology. Guests are accustomed to real-time, on-demand services from companies like Uber, Amazon, and Netflix. They expect the same level of personalization and streamlined service from hotels and restaurants. Self-service kiosks, mobile check-in/check-out, smart room controls, and automated amenities allow guests to curate their own experiences.

By leveraging data analytics and automation, hospitality businesses can cater to each guest individually and provide customized recommendations and offers. Today's consumer is experience-driven, and seamless service through technology is now expected rather than a pleasant surprise. Hospitality operators must prioritize digital capabilities and automation to meet and exceed evolving consumer expectations.

2. Optimizing revenue 

Pricing optimization and revenue management solutions are stepping up to eliminate uncertainties in hotel pricing by automating pricing adjustments throughout the day, providing hotel organizations with a strategic edge in enhancing revenue and profits. Hoteliers are turning to advanced hotel revenue management solutions driven by precise machine learning algorithms that can calculate demand forecasts, suggest strategic selling approaches, and automate processes like stay controls and room category management.

Inspired by strategies employed in the travel and ride-share sectors, certain dining establishments are adopting a dynamic pricing model. This entails providing discounts during less busy periods and adjusting prices upwards during peak demand. As per the State of the Restaurant Industry Report, roughly four out of five adults respond positively to this pricing strategy.

3. Labor shortages and costs

The hospitality industry has been facing acute staffing challenges, making it difficult for operators to adequately staff their properties and provide high-quality service. Labor shortages have been driven by record-low unemployment rates, a shrinking workforce population, and lagging talent pipelines. Many hospitality employees left the industry during the pandemic, opting for more stable jobs with better pay and predictable hours. This has created a talent crunch, with many hotels and restaurants struggling to recruit and retain workers.

Along with labor shortages, wage rates have been rising rapidly across the industry. Minimum wage increases in many states and cities have bumped up overall labor costs. Rising competition for workers has also driven up hourly wages—like California, which raised the minimum hourly rate for QSR employees to $20 starting April 1, 2024. Tight staffing coupled with rising wages has led to a dramatic increase in hospitality labor costs, squeezing operators' bottom lines. As labor remains hospitality's largest operating expense, rising costs have made it imperative for operators to find ways to do more with less staff.

Workforce management tools automate the process of scheduling staff, tracking their hours, and managing their performance. They also help with compliance by ensuring that labor laws and regulations are followed. This not only saves time and reduces administrative burden but also helps to improve staff morale and retention.

4. Operational efficiencies

Automation allows hotel and restaurant operators to streamline operations and improve productivity in several ways. By relying on technology to handle routine tasks, staff can focus on providing excellent customer service instead of manual work.

For hotels, a modern, integrated property management system (PMS) automates tasks such as room booking, check-in, and check-out, billing, and inventory management, freeing up staff to focus on providing excellent guest experiences.

For restaurants, a point of sale (POS) system that automates the ordering and payment process not only speeds up service but also reduces the chance of errors. It can handle multiple payment methods, split bills, and even manage loyalty programs. Additionally, it provides real-time reporting and analytics, giving restaurant operators valuable insights into their business performance. Inventory levels are tracked in real-time so restaurants can optimize food costs.

Self-service kiosks allow guests to check in and check out or order and pay without waiting in line, supporting faster turnover, especially during peak periods. Utilizing a reservation system to streamline bookings for hotel amenities, restaurants, and entertainment assets, including tables, fitness machines, cabanas, and more, delivers better amenities and asset management.

Together, these automated systems enable hospitality operators to serve more guests efficiently. By streamlining repetitive tasks, automation allows staff to focus on providing better service.

5. Enhanced guest experiences

Automation allows hotels and restaurants to provide guests with more customized, seamless, and intuitive experiences that exceed expectations. Self-service kiosks with easy check-in/check-out, touchless mobile payments, and automated scheduling of services (like housekeeping and dining reservations) give guests more control over their stays.

With integrated property management systems and data analytics, staff have instant access to guest preferences and can personalize each visit. Guests feel recognized and valued. Operations teams also gain data-driven insights to refine offerings and tailor them to specific guest segments.

Mobile apps allow guests to access services, receive notifications, and request amenities from anywhere at any time. Travelers today expect this level of convenience and personalization. Automated chatbots can quickly handle routine guest inquiries, freeing up staff to focus on providing genuine hospitality.

Overall, smart automation enhances each touchpoint across a guest's journey. It facilitates the delivery of hyper-customized, anticipatory service that caters to each visitor's unique needs and desires. This builds lasting loyalty and emotional connections.

6. Better employee experiences 

Automation in hospitality enables better experiences for employees by reducing repetitive manual tasks and allowing staff to focus more on engaging with guests. With chatbots handling routine guest inquiries and mobile solutions streamlining maintenance workflows, employees can devote their time to more meaningful interactions. Automation eliminates the grunt work of manually entering data, searching multiple systems, and shuffling paperwork. Staff is relieved of these mundane chores and can invest their efforts into elevating the human element of hospitality.

For example, at check-in, automated kiosks reduce queues and check-in times, enabling front desk agents to focus on greeting and welcoming each guest personally. Automated service ticket systems let maintenance staff spend time proactively addressing issues rather than manually logging requests. With tablets that sync updated room statuses, housekeepers can focus on perfecting the room experience rather than tracking paperwork.

Across roles, automation removes the busywork and enables staff to focus wholeheartedly on offering excellent and attentive service. By taking over repetitive manual tasks, automation empowers employees to focus on engaging with guests and delivering thoughtful, personalized hospitality experiences.

7. Data-driven insights

The data gathered from automated systems provides hospitality operators with invaluable customer and operational insights that can drive better decision-making. With automated point-of-sale, property management, and other systems, companies gain access to a wealth of customer data, including preferences, spending habits, satisfaction levels, and more. This allows them to understand their guests better so they can tailor offerings, target promotions, and provide personalized experiences that keep customers coming back.

Leveraging a customer relationship management (CRM) system automates the process of managing customer interactions. This system collects and analyzes customer data, helping businesses understand their customers' needs and preferences, personalize their offerings, and build stronger relationships.

Automation also produces operational analytics related to staffing needs, inventory management, profitability, and other metrics. By monitoring real-time data from sensors, IoT-enabled devices, and integrated systems, managers can identify problem areas and opportunities for improvement. Instead of relying on guesswork, they leverage actionable data to boost efficiency. Automated reporting eliminates manual tasks while producing comprehensive overviews of performance. With data-driven insights from automation, hospitality operators gain significant competitive advantages.

8. Competitive advantage

To thrive in today's age, hotels and restaurants cannot afford to fall behind when it comes to adopting new technology. Those that fail to automate and streamline their operations risk frustrating today's increasingly tech-savvy guests. Customers accustomed to seamless digital experiences expect the same level of convenience when booking rooms, ordering food, and accessing amenities. Venues that rely on outdated processes often deliver a clunky, disjointed experience that turns people away.

Losing guests to competitors with better technology directly hurts the bottom line. Operators striving to maximize revenue simply cannot ignore the role of automation and innovation in attracting and retaining patrons. With so many options out there, dissatisfied guests will quickly take their business elsewhere if a hotel or restaurant lacks the cutting-edge systems they desire. The venues falling behind today will be the ones struggling to fill rooms and draw diners tomorrow.

The stakes only grow higher as new startups disrupt the market with tech-driven models. To stay competitive, operators must keep pace and continually modernize their systems and services. Those refusing to adapt to major industry shifts will watch their customer base erode over time. Maintaining a competitive edge demands embracing automation now to deliver the experiences that consumers and guests expect.

Adapting for the future with technology 

In the hospitality industry, technological innovation emerges as the decisive factor that can significantly influence financial performance in 2024. From handling reservations, processing orders, and payments to enhancing upselling and streamlining operations, the potential for advanced solutions like those from Infor Hospitality to drive efficiency, insights, revenue, and personalized experiences is expanding rapidly.

By taking a proactive approach, hotel and restaurant operators can shape how technology transforms their organization rather than resisting changes that will happen regardless. Embracing and preparing for automation will ensure companies can continue delighting guests, attracting talent, and sustaining profitability. The time is now not just to adapt but lead the way. Savvy hospitality organizations of all sizes that can harness these capabilities while staying responsive to the dynamic consumer landscape are poised for substantial growth in the upcoming year.

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