Hotel Owners’ New Financial Realities Thwart Pandemic Tech Push by the Major Brands


Source: Skift
By Cameron Sperance

July 27, 2020

Hotels emerging from coronavirus lockdowns will increasingly rely on technology to practice social distancing guidelines with features like mobile check-in and room service, companies like Hilton announced in the early days of the pandemic.

A greater tech embrace throughout the hotel industry could even help cut down on labor costs at a time when occupancy rates and room revenue are their lowest in recorded history.

But furloughed corporate workforces, limited cash reserves, and labor union pushback may hinder how much disruption can actually come to hotels in the next few years.

As the industry moves from survival mode into recovery, analysts and executives still see the current downturn in travel as a rare opportunity to disrupt hotel operations and streamline costs.

“Hoteliers only have two levers: revenue and expenses,” Magnuson Hotels CEO Thomas Magnuson said. “It’s really critical to use your technology to pay attention to your operating costs.”

Operations costs often remain high even in a low-demand environment like today, Magnuson added. Software platforms can help struggling operators with something as simple as housekeeping scheduling – “the largest variable in limited-service hotel budgets,” Magnuson said.

But the potential for front-of-house labor spats and even guest preferences for human interaction mean tech features will likely throttle ahead more on the operations side than with actual worker displacement.

Read the full article here.


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