Over the last decade, labor costs have risen sharply and in 2022, labor shortages are plaguing businesses across the world, and the hospitality industry is no exception.

Demand for workers has never been higher, yet universal labor shortages persist, causing problems for hotels, despite the sharp rise in travel.

Two-plus years removed from the pandemic, and travel has come back in a big way. Hotels everywhere had a record-breaking summer of travel, but they did so with reduced capacity thanks to on-going labor shortages.

With rising wages and the supply of workers still at historically low levels, hotels are struggling to stay afloat during these unprecedented times. Hotel operating costs have a direct impact on a property’s bottom line. So, it’s no surprise that labor shortages and rising costs are taking their toll. To find out the real impact of rising labor costs on hotels and their guests, continue reading below.

How operating costs affects the bottom line

A hotel’s operating cost directly impacts a property’s profitability. Wasteful spending depletes profit margins and threatens a property’s financial health and long-term viability. Hotels must find a balance between over-spending and sacrificing vital services that will negatively impact the guests’ experience.

While it’s true you get what you pay for in terms of labor and service, given the new high cost of labor, hotels must find new ways to reduce costs without impacting the guests’ experience.

Worker shortages and the new high price of labor

Two years ago, we saw labor and related costs cut by over 50% to offset the nearly 60% decline in total revenue. Today, total labor costs have risen to over 50% of hotel expenses through GOP. For hoteliers, this means that cutting operating costs is the obvious solution to minimizing losses in hotel profits.

Hotels are eager to return to full operating capacity. But the new high cost of labor is hindering their ability to return to normal.

The impact on guests

As travel continues to be a priority for travelers who are eager to make up for lost time, hotels are challenged to maintain the depth of staffing needed to meet the demands of travelers that expect hospitality on their own terms.

Fortunately, there are solutions to assist hotels with staffing shortages, or struggling to provide exceptional, even just adequate, customer service to guests.

A solution for the hotel industry’s staffing shortage problem

Given the high cost of labor, and to combat labor shortages, it’s time to utilize the next generation of hospitality-specific tech so that your staff can focus on your valued clientele.

Only the hospitality industry’s first AI-powered virtual hotel agent can immediately address hiring and staffing challenges. That includes answering up to 60% of the calls for your front desk, answering FAQs specific to your property, understanding multiple languages, routing calls, sending follow-up texts, and much more.

Meet Annette (formerly “Bella” by Travel Outlook), The Virtual Hotel Agent™ and immediately and effectively improve your guests’ experience. And do it affordably.

About John Smallwood, President of Travel Outlook

A veteran in the hospitality industry, John has owned, developed, and managed hotels for many years. After earning a BBA from New Mexico State University, he started his career with AT&T, gaining invaluable insight and experience in the early years of the data revolution. His experience in technology and hospitality merged in his development of Travel Outlook, the world-class hospitality contact center. More recently, he has branched out with the creation of ExpressRez, the premier contact center for the Bed and Breakfast industry, and with the creation of Annette (formerly “Bella” by Travel Outlook), the first AI-powered voice bot for the hotel industry.

About Travel Outlook, The Premier Hotel Call Center™

Given its progressive approach to the voice channel – in terms of performance, training, transparency, testing and the tools used to measure performance – Travel Outlook, The Hotel Call Center as a Hotel Profit Center™ is the leading voice reservations team in hospitality. Travel Outlook’s valued client list includes Viceroy Hotel Group, Curator, Outrigger, KSL Resorts, Proper Hospitality Group, Pacific Hospitality Group, Highgate Hotels, Atlantis, The Irvine Company, Catalina Island, and many others. Travel Outlook’s team and approach increases sales conversion and helps to create more effective voice communication between hotels and their guests, resulting in improved social scores in addition to increased voice channel revenue. www.traveloutlook.com.

About Annette, The Virtual Hotel Agent™

Annette (formerly “Bella” by Travel Outlook) is an AI-powered virtual call center agent that represents the next generation of voice assistants, and she is designed specifically for the Hospitality industry. Annette has been programmed using a breakthrough approach to digital voice assistants, a system built from human conversations. Using social media, chat forums, and movie dialogue, Annette learns from billions of casual human conversations to understand human inflections and multi-turn queries. This revolutionary approach means Annette understands callers no matter what they say, when they say it, or how they speak. Annette can answer FAQs specific to your property, understand multiple languages, route calls, send follow up texts, and more.

Media Contact: Raul Vega, President, LEVEL 5 Hospitality, LLC

vega@level5hospitality.com