We hear about labor shortages in the hospitality industry these days, but there’s another performance drag that also deserves our attention: staff onboarding and training. One of the biggest benefits of hotel software automation is its ability to support small-staffed teams and streamline processes. Less often advertised is how it can also reduce the time it takes to train employees, which saves money.
Employee turnover: the high cost of lost knowledge
The hospitality industry is one of the largest employers in the world. It is also an industry well known for its extraordinarily high turnover rate. In 2020, the industry had a high pandemic-induced turnover rate of 130%, but in 2017 the hospitality sector had an average turnover rate of 72.4% (Bureau of Labor Statistics Job Openings and Labor Turnover report). More recent figures show that the industry’s current turnover rate is around 73.8%, which is significantly higher than the national average employee turnover rate across all industries of 12-15%.
Staff turnover has a direct impact on a company’s revenue and profitability. When it comes to the hospitality industry, its exceptionally high employee turnover rate is a driver of operating costs. While numbers can vary depending on an employee’s position and salary, according to Gallup, the average cost of replacing an employee can range from half to twice an employee’s annual salary. In numbers, a 100-person organization offering an average salary of $50,000 could have turnover and replacement costs of around $660,000 to $2.6 million per year – a high price to pay. This high sum includes hiring costs, lost sales, productivity and employee training costs – because once you hire someone, you have to train that person too.
Employee training and hotel technology: an essential but not easy task
Training is an essential part of any job, especially in an industry as consumer-oriented as hospitality. Getting it right is important because when an employee is confident in their skills and abilities, they tend to complete assignments faster, more efficiently, and more successfully. Without the right training, hoteliers not only risk damaging guest relations with poor employee knowledge and communication, but they also lose revenue opportunities.
And it doesn’t just stop at new recruits; seasoned professionals and existing employees all need upskilling or training at some point. This is not a one-time exercise, but an ongoing strategy to ensure everyone in your hotel keeps their knowledge and skills up to date.
Often one of the biggest hurdles hotels have to overcome is training employees in the proper use of technology. It’s one of the most poorly done jobs, which is ironic because without the right training, hoteliers can’t leverage their latest technology investments to their potential.
On average, across all industries, an organization of 100 to 10,000 people can spend between $581 and $1,678 per employee on training. An even bigger number in an industry with high turnover – investing time, resources and dollars, only to see it come out a few months later – and then, repeat.
In short, training is a brake. It’s a hindrance for the people who have to do it and a hindrance for the company who has to pay. This can be extremely demanding on a business and difficult for any part to legitimately get excited about. But imagine a world where training was easy, not strenuous, even cost effective – maybe no cost at all.
Automation: the currency that saves time – and money
By now, it is well known that automation increases productivity by automating tedious processes. This frees up valuable time for human workers to focus on more important and dynamic work.
Thus, automation has a direct impact on the time required to train employees. A skill, such as upselling, typically requires extensive training, incentives, quality tracking, and ongoing training. Get a new front staff member and repeat the process. But with an automated upselling solution such as ROOMDEX, the time and associated costs required are greatly reduced, if not eliminated. Why? Because the system doesn’t need to be trained, retrained or incentivized. It’s a slot machine that continues to work consistently.
“We’ve always worked with some sort of upselling tool – from HR-based upselling where you have training and upselling on the property, to semi-automated systems where you upsell at the end of the trail. from the booking engine, or as an email. And, of course, they all required human intervention… But ROOMDEX Upsell Automation is an out-of-the-box solution that offers the lowest revenue a hotel can generate..” Jens Egemalm, Director of Distribution, Pandox Operations.
“ROOMDEX is at the top of my list! Reception don’t need to spend an extra second for upselling.” Georgios Rouvelas, General Manager, Hotel Juliani, Malta.
Hotels work with fewer resources; turnover remains at a record level and training budgets are tight. A training-intensive task such as upselling is no longer manageable or practical with fewer resources. As upsell automation removes the need for training, it gives hoteliers back much-needed time to provide customer service and capitalize on other revenue opportunities.
About ROOMDEX, INC.
ROOMDEX’s hotel upsell software, “Upgrade Optimizer”, automates, monetizes and ultimately simplifies the hotel room upgrade process by putting the choice in the hands of hotel guests. Automation is the cornerstone of our pioneering hotel optimization platform. ROOMDEX uses hotel booking, guest data, and its proprietary personality and price algorithms to deliver personalized digital offers, dramatically improving the guest experience. The hotel upselling tool relieves hoteliers of the labor time required by other upselling solutions while delivering high margin revenue and a substantial return on investment.
The company was founded by Jos Schaap, Pierre Boettner and Denis Bajet, three industry veterans (Ex. MICROS-OPERA (now Oracle Hospitality), StayNTouch, Shiji and Nor1). ROOMDEX is built on over 90 years of hotel software innovation experience in PMS, integrations, revenue management, BI, mobile, self-service, and bid optimization software at the level. Since its inception in Spring 2020, ROOMDEX has signed over 100 hotels with 9,500 rooms in the US, UK and Europe.
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