Does Increased Automation Mean that Limited Service Hotels are Going to Become Vending Machines? | – Hotel Technology News

As limited service hotels dont typically earn their bread from high-touch service, the stage is already set for them to eventually become autonomous business units.By Larry and Adam Mogelonsky - 5.31.2022

Numerous inventions inscribed by science fiction books and films have become reality. But while real life is gradual and nuanced, science fiction is a blunt brick in how it takes these technologies to their often-darkest extremes. So, per the title, lets discuss this radical question as perhaps there are some cost benefits that you can achieve for your own organization.

Whats meant by vending machine is a place of near-perfect automation hardware, deeply integrated software and IoT everywhere where very little onsite labor is needed to sell (or vend to use the Latin root) as well as maintain inventory availability.

As they say in economics classrooms, Tell me the incentive and Ill show you the behavior. With labor the most expensive line item for the average property, hotel brands are continuously incentivized to look for newer ways to further automate in order to limit this cost. As limited service hotels dont typically earn their bread from high-touch service, the stage is already set for them to eventually become autonomous business units.

Unlike sci-fi, this forecast will be decades in the making. And it is hardly an all-or-nothing evolution, with prominent exceptions like a beachside, select-service hotel that foregoes a purely cost-based approach to operations in favor of a handful of meaningful amenities that sharply enhance the onsite experience. Rather, lets look at the current influences so that you can envision the next five or so years for your company as well as some of the ways that technology can be deployed in each department.

The Airbnb Hegemony

Fight and deny all you want, but Airbnb is now the largest supplier of rooms inventory for any single accommodations entity. As such, they have a profound influence on the macro-trends for all guest profiles, regardless of how you demarcate hotel guest from vacation renter. And from this proliferation of short-term rentals, travelers now expect keyless room entry, unique spaces, flexible room configurations and a few workcation amenities like a kitchenette.

Crucial to understand here is how companies like Airbnb have sped up the modern tempo of travel. Everything is fast and frictionless (with in-person contact largely seen as a point of this friction), and this extends across all segments and star ratings. Guests will still enjoy meeting new people and chatting while abroad, but they no longer want to waste time on transactional conversations. They dont want to line up at the front desk for check-in. They want to be able to reserve dining or spa appointments off a website or app without any human interactions. They want a frictionless journey so that their time is better allocated towards meaningful experiences.

Technology Depresses Prices

Essential for you to note, technology is naturally deflationary because of the new cost savings that are derived from said innovation, namely increased labor productivity (automation that augments output per worker), improved supply chains (either through better methods of transportation or access to new markets) and faster information flows (to reduce market price asymmetry).

Automation and cheaper supply costs over the long run mean that a hotel can reduce its overhead and charge less while maintaining its margins, thereby making it more competitive. Consider price transparencies brought about by the OTAs that have resulted in hotels no longer being able to get away with grossly overcharging customers. Comparative information is now too widely available, meaning that a propertys rates will gradually be forced down to a fair number as members of the comp set continually undercut each other to gain market share.

Voluminous economics tomes have been written on this principle. In hospitality, to fight this race to the bottom, we brand, we rebrand, we advertise, we package, we renovate, we personalize, we unveil new amenities and so on. But for certain properties at the economy and midscale, commodification inevitably occurs, with the guest only looking for a bed in a quiet room where the lowest price is the law. And in a world that is constantly deflating certain industries, automating these purely heads-in-beds hotels may become the only way to maintain the owners targeted bottom line.

In Each Department

For the hotel vending machine, no onsite administration is necessarily required the front desk manager, executive housekeeper and GM can go in favor of regional control. The only people you will need onsite are room attendants, public area custodians, engineers, IT personnel and security guards, all of whom can be remotely directed through an operations platform. Here are some more tactical ways in each department that technology will continue to meet the modern guests demands and rescue the income statement.

Larry and Adam Mogelonsky represent one of the worlds most published writing teams in hospitality, with over a decades worth of material online. As the partners ofHotel Mogel Consulting Limited, a Toronto-based consulting practice, Larry focuses on asset management, sales and operations while Adam specializes in hotel technology and marketing. Their experience encompasses properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Their work includes six books Are You an Ostrich or a Llama? (2012), Llamas Rule (2013), Hotel Llama (2015), The Llama is Inn (2017), The Hotel Mogel (2018) and More Hotel Mogel (2020). You can reach Larry atlarry@hotelmogel.comor Adam atadam@hotelmogel.comto discuss hotel business challenges or to book speaking engagements.

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Does Increased Automation Mean that Limited Service Hotels are Going to Become Vending Machines? | - Hotel Technology News