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    HITEC EUROPE 2019

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    April 10–11, 2019
    Palau de Congressos
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Article by Robert Rauch, CHA

Flexing Hotel Labor Today

R. A. Rauch & Associates, Inc. 7 March 2019
In a market of uncertainty and seasonal fluctuations, managing hotel property expenses is a challenging job that remains on the forefront of the minds of strategic operators. Hotels that implement a staffing strategy that adapts to these changes will keep operations running smoothly throughout the year and even throughout an economic slowdown. This can be a remarkable way to improve profits when revenues are flat or even down. With a focused attention on payroll, creative training programs, automation, and F&B streamlining, hotel operators can reduce turnover and ultimately cut property costs.According to both Marcus & Millichap's national economic outlook and CBRE's report on hotel profitability, wage growth slowly increased, especially in the hospitality sector. In 2019 an average 3% pay increase is predicted, which is the same as 2018 and 2017 in the U.S. Additionally, the real wage increase is forecast to be 0.6%, down from 1% last year. This takes into account an expected 2.4% inflation rate in 2019. This year minimum wage has also increased in 19 states and 24 cities. This wage growth across the country lends little opportunity to achieve cost savings when average rates remain flat.To combat this, operators need to find creative ways to retain employees with something other than higher pay. Training is an investment directly linked to employee retention and not only improves output, but will also lead to higher job satisfaction. In times of economic stress, one of the biggest mistakes operators often make to try to manage expenses is cutting training. With maintained training programs, turnover is expected to decrease, productivity will increase, and the cost of finding, hiring and training new employees will shrink as well. This has been proven by almost all major hotel companies over the past 30 years.With a highly seasonal industry, operators need to ensure their year-round employees have meaningful work during slower times. One successful technique to ensure consistent productivity is cross-training employees for different disciplines within the hotel. This will foster increased work efficiency and will allow employees to take ownership over what happens on property. Employees stronger sense of responsibility will make the most of their talents and skills, ensuring labor cost optimization. For example, in a hotel's rooms division, Front Desk Supervisors should execute desk responsibilities and whenever applicable, cover all or part of a shift thus reducing agent hours. The Assistant General Manager can also work partial desk shifts in an effort to reduce desk agent hours either on schedule or when agents are sent home early due to limited activity.Unique Ways Toward ProductivityAs an operator, it is critical to decide which positions are mandatory to run an efficient operation. Automation is something that scares many operators but the truth is, automation can improve productivity and virtually never causes a reduction of jobs. As an example, we utilize a service robot from Savioke that delivers sundries, housekeeping supplies and food and beverage items to guests without having to page an employee and pull them off their primary job. Guests love technology so there is no disappointment when our robot arrives and calls the room.Today's workmen's compensation claims have risen sharply in the area of housekeeping employees injured while vacuuming. The answer? A robot from Maidbots. This robot vacuums rooms while housekeepers tend to cleaning the bathroom. While it takes longer to vacuum a room robotically, the productivity increase is significant.Enrolling in sustainability programs not only lowers energy costs, but can also result in significant labor cost savings. In fact, the Thayer School of Engineering at Dartmouth found that 92 percent of a building's design, construction, operations, and maintenance costs come from labor and labor-related costs. An example of this realized savings from sustainability efforts can be seen at one of our hotels in San Diego. RAR Hospitality's management team has implemented the Green Clean program, which offers guests a $5 credit should they opt out of full clean service each day and many hotel companies are implementing a similar program.In food and beverage, it is time we made it easy for today's guests to have a choice of self-service with an iPad or assistance from a manager when ordering in a fast casual or casual restaurant. Servers will be able to handle significantly more customers this way. Does it replace servers? Possibly, but it will increase the number of jobs in software development and many servers are educated enough to fill those spots.The bottom line is, we need to be prepared for a change in economic conditions. With labor being a hotel's largest expense generator, the benefits of these seemingly minor changes will accrue in increased productivity and reduced overhead. Start now and watch profits rise for another two years. To a strong finish and another profitable year in our industry!
Article by Robert Rauch, CHA

Next wave of hotel tech puts guest needs, control first

R. A. Rauch & Associates, Inc. 19 March 2018
Hotel technology will continue to be led by mobile, digital room keys and in-room entertainment, but another emerging technology is blockchain.A continuously growing list of records, which are linked and secured using cryptography, a blockchain is resistant to modification and is an open, distributed ledger that can record transactions such as membership loyalty programs.In regard to pre-stay communications, we have used Flip.to, which makes it easy for guests with reservations to share deals and tell friends about their upcoming stay.Another trend worth watching occurs just after rooms are booked. This began with metasearch giant, Kayak, and has led to a lack of room rate growth as hotels deal with the commodity mindset, where guests feel that they can get a better price if they continue to search. Google is adding a price tracker for hotels with which guests can receive price fluctuation alerts after booking, their apparent goal being to become a first-choice booking service rather than solely a search engine.Once guests arrive, mobile check-in, text and chat take center stage. Mobile check-in has been around for the last few years, but will hit full stride as the technology is refined. If a guest does not utilize mobile check-in by going directly to their room, they will check in at a pod rather than a formal front desk. These pods will be tablet-based kiosks where guests can pick their room directly from their phone and the door lock will be programmed to open only when that mobile device is nearby.Taking this idea into the rooms themselves, some brands have moved away from traditional guestroom phones and opt for in-room tablets controlling every aspect of the room. Ideally, these two sets of technology will merge so guests can control everything directly from their mobile device.Texting guests in response to "in-the-moment" needs, security issues and eliminating language barriers are all technologically feasible. Texting provides ancillary revenue streams (we've beta tested an "eat, play or shop" app that guided guests to local deals). Chat is already global, and chatbots are AI customer service assistants. Services like Zingle offer automation and communication with guests from one central hub.The internet of things (IoT) translates the smart home experience into the hospitality world. Technologies such as sensor-activated thermostats, digital room keys and in-room streaming services are all possible today. Getting the IoT upgraded to the network is coming soon and voice activation will be at the top of the list, enabled both by mobile users and Amazon's Echo or Google's Home.The emergence of artificial intelligence into the guest journey is already here. Hotels like Fairfield Inn & Suites San Diego North/San Marcos have had a Relay robot for almost a year. AI is a fast-moving technology enabling machines to perform tasks that previously only humans could.Robots will continue to impact areas of the guest or associate experience in 2018, a benefit being the data provided as guests utilize the services. In-room technology is vastly different than it was at the turn of the century. Today's guests expect the in-room entertainment experience to be on demand and better than what they have at home. Additionally, customizable technologies such as custom lighting, smart mirrors and in-room tablets allow hotels to tailor to guest preferences before arrival.Data and analytics lead to winning the loyalty game. Data can segment guest profiles to infinite degrees, creating a comprehensive picture of who's staying at our properties. We can track guest habits, interests, preferences, reason for travel, booking date, date of last stay and more. Data and analytics must be mined to measure successes, look for new ways to improve our guest experience and market toward specific demographics. Search engine marketing, optimization and advertising initiatives are crucial to our hotels' success in this digital age.Online travel agencies continue to impact our market share and will likely become involved with more guests and their stays. The Expedia Travel Platform will continue their involvement with meeting planners and most likely disrupt other areas soon. OTAs want to own the guest at every step from pre-stay to post-stay. That means we must use caution in embracing them in areas where we can do it ourselves. Perhaps blockchain will be our savior.Blockchain, which is a clear and incorruptible path from the hotel to the guest, has the ability to create more direct and lower fee transactions. This direct route is a potential disruption to OTAs as they continue to grow and impact our industry. Let's at least get their commissions back down to the 10% we always gladly paid travel agents. Wouldn't that be nice?
Article by Robert A. Rauch

Revenue and cost strategies for boutiques, independents

R. A. Rauch & Associates, Inc. 27 July 2017
Let's look at the revenue components of an independent hotel. A savvy sales team can make or break your hotel as group business generally books well in advance to provide the ideal base business. Without the power of a brand sales team and the tools that they provide, your independent hotel's sales efforts need to ensure that they are utilizing the right channels to effectively capture transient demand.While global distribution system business is mostly pay-to-play, it provides exceptional return on investment in the right markets. Responding to requests for proposals from national accounts can be tedious, but it is an essential piece to your revenue puzzle. Local negotiated rates are equally important for your sales team to seek out. These accounts are special rates set up with local businesses that have travel needs in the area and driven by the relationships your team develops with the travel manager of the company.Direct bookings are the most cost-effective business for boutique hotels, so it is always the goal to drive business to our own booking channels. Identifying what percent of business you need from group sales, GDS and online travel agencies is paramount to a successful revenue strategy. Understanding the cost of all of your booking channels allows you to properly layer in business by evaluating the effective average daily rate and adjusting your available rates accordingly. Set occupancy thresholds for your hotel as key indicators of when to increase your rates.Balancing meeting rooms and sleeping rooms has always been tough for revenue managers who have not been on the group sales side of the business and salespeople not familiar with RFPs. They must equip themselves with new tools. Identify your hotel's ideal rooms-to-space ratio to optimize profits on any piece of group business and to ensure your revenue manager and sales team are on the same page.Events and other contributing factorsWhile events might not provide a large number of roomnights, they do get people in the door of your hotel and help marketing efforts. If your hotel has an in-house food-and-beverage department, then capitalizing on these events is even more critical to achieving financial success and should be incorporated into your revenue strategies. Farm-to-table and locally-sourced product is expected at every dining occasion, and healthy options are also prized in today's market. Ensure your F&B team is keeping up with the latest event software--we use Social Tables)--healthy living trends, maintaining creativity and adjusting their menus accordingly.A destination is a high contributing factor in the decision-making process, so your sales team should highlight all of the attractive aspects of the local area. Does your hotel have a great bar for guests to grab a happy hour drink after their meeting? If your hotel is limited on amenities, then provide information on your local area and everything that could be attractive to a first-time visitor. The "work hard, play hard" mentality has taken the market by storm, so even if a client is looking to host a business meeting, they will also be exploring what to do once their meeting is finished.Digital marketingThe importance of marketing in your overall revenue strategies cannot be overstated, as it is the crux of how your boutique hotel sets itself apart. Establishing your hotel's identity and voice and ensuring that they are effectively communicated to all outlets is a must. Without the power of a big brand behind you, you are awarded the chance to create a brand that really defines the hotel and the experience your team provides. Your social media platforms create a stage for your hotel's voice to be heard, so their importance is far greater than they would be for a branded hotel. Develop creative packages and collateral that capture the guest experience to set yourself apart from a franchised hotel. These pieces tell a story that evokes a potential guest's wanderlust and shows value.Your website should be constantly updated with local happenings, events and hangouts to keep up with search engine optimization (SEO) changes that stress local focused searches. This is a complete advantage over branded hotels that have monotonous websites with limited control over content. The goal is to create a local community hub that provides exceptional content to any visitor.Revenue management should never be on the back burner, especially for boutique hotels. Strategies need to be constantly looked at and questioned so that they can evolve. Pay attention to your rates daily and check them multiple times per day during peak demand periods. Schedule weekly revenue meetings with your hotel's key managers so that everyone involved is staying engaged and on the same page with your current strategies. Independent hotels can adapt quickly to changes in the market, so use this to your advantage.Good luck!
Article by Robert A. Rauch, CHA

Ten Years After - Hospitality Technology 2017

R. A. Rauch & Associates, Inc. 16 May 2017
The rise of digital technology has molded a new kind of traveler, one who embraces available tools and uses them to jump across industry-defined silos. These new travelers do not need handholding; they need the resources and technology to be able to be self-sufficient. They want to be able to make reservations, check-in and plan their trip via a virtual concierge, all while sharing their experience on their social media outlets.Although today's traveler demands a high degree of personalization, increased technology use has created an interesting paradox: the human part of the service economy may diminish in importance with the rise of the independent, digital traveler forging his or her own way. Big data offers a way for travel companies to provide that invisible pillar of support to balance the inevitable expectation of a customized experience while simultaneously enhancing the need to remain independent.The boundary between professional and private worlds is increasingly blurred as a result of mobile devices that are changing business travel as we know it. Business travelers, especially Millennials, want to access readily available deals and tools when they travel. A recent survey by Pullman Hotels reports that:43 percent of international travelers always take their mobile professional devices with them on holiday or on weekend trips.89 percent of seasoned international travelers say mobile professional devices are a means of staying in touch with their loved ones.While there is a real conflict between personal and professional lives of travelers, business travelers are more upfront about adding on leisure time at the end of business trips. This traveler is known as the "bleisure" traveler and is now becoming a target for many properties. This presents new opportunities for airlines, hotels and destinations alike, all of which have to configure their services to be flexible. Conference and meeting planners also need to be cognizant of these changes.In addition to mobile devices changing business travel, they have created new sources for bookings. Travelers are overwhelmed by choices when booking online and mobile is creating the need for a better-curated experience. Booking providers can deliver well-targeted information to travelers due to their mining and analysis of all kinds of data. The growth of HotelTonight is an example of a mobile solution that focuses on the user experience and provides a quick and easy booking opportunity.With the mobile explosion has come the launch of apps that are helping merge customer service with the digital age. Apps are being used for everything from a digital concierge experience to accessing big data. Geo-location can make it easy to sell guests something that is literally right in front of them. A prime example is 1App, which sends guests deals to eat, shop and play in accessible areas. While we tried it as a beta test for hospitality, it has found a place in the retail sector.When thinking about how apps are changing the industry, it is also important to remember that the days of "walk-in" reservations are dwindling. With today's technology, guests rarely walk in to inquire about room availability. Instead, they turn to mobile tools to make their reservation. Mobile is the new walk-in. And, as most have heard, many hotel guests are checking in via mobile phones this year. While it is only effective for a party of one, (your significant other will not be able to use the smart phone key as only one at a time can be issued) this is available at select Marriott and Hilton properties.In addition to using apps to increase reach, hospitality businesses are utilizing the power of social media to grow. Facebook improves brand reputation, enhances listings and allows businesses to offer unique deals. Twitter lets hotels connect with guests in real time. However, it is not easy to set up and optimize your Facebook page and maintain your Twitter account without paying someone qualified to do it. Social media must be a crucial component of the marketing mix. Think of your property's Facebook page as a second website with the option for guests to contact hotel staff and make reservations.Technology and the importance of mobile sites are not just a trend, they are the new reality of hospitality. Having an understanding and a strategy for digital technology and mobile sites is key to successfully being able to reach the "new" traveler. Now is the time to tighten up mobile sites and find a balance between customer service and the self-sufficient traveler. Millennials have arrived and many other travelers have a millennial mindset. Yes, ten years after the tech explosion, times have changed. Embrace it - and enjoy a great remainder of 2017!

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