In the age of automation, Love is still being made by hand: the role of RPA in the Hospitality industry
The harsh truth about working in Hospitality
According to a Perkbox' survey, Hospitality is the fifth most stressful industry to work in, with 64% of employees suffering from workplace anxiety. Therefore, it is not surprising that a significant number of hospitality workers are reconsidering their employment situation and evaluating different career options. And, if possible, the recent COVID pandemic made things even worse: last year's US Job Market Report demonstrated that not only "45% of hospitality workers who have remained in the industry report lower job satisfaction now than before the pandemic," but also that around 25% of the ones who quit the industry are not willing to work in it again.
Reasons are numerous: from low pay to lack of benefits, from schedule inflexibility and unpredictability of working hours to the pressure of dealing with demanding guests. We have to come to terms with it: the grass is, indeed, not as green on the hospitality side as we think it was. A recent study by DW highlighted how a good portion of workers from hotels and restaurants moved to the retail sector post-COVID, and that such workers are "difficult or impossible to win back because they have become accustomed to regular working hours and weekends off."
Create, Import, or Replace?
All the above-mentioned reasons contributed to one of the major (if not the major) problems in our industry today, one which cannot be easily solved, at least not with conventional measures: labor shortage. And if some studies suggest that Hospitality has been understaffed at least since the mid-2000s, the situation has never been more critical. It seems the only way out of this situation can be found in one of the following measures:
In order to "create" new workers, the industry should focus on training them first. However, at least from a purely academic perspective, the situation is, at best, alarming. The majority of papers published on the subject point to the identical, dire conclusion: 1/3 of hotel management and food and beverage services students decide not to pursue a career in the industry.
Currently, immigrants make up 22% of the hospitality workforce, so "importing" workers can be a viable solution, yet not a definitive one, especially in countries with strict immigration policies. Think of the UK, for example: due to Brexit's new visa income requirements, many EU workers have either chosen (or been forced) to leave the country. To put things into perspective, it's worth quoting a report published by The Independent, which found out that "up to 75% of London's hospitality workers (pre-Brexit) were from the EU."
In 2020, the number of births in Japan fell to 840,832, the lowest since 1899. Prime Minister Shinzo Abe called it a "national crisis," because, if the trend does not revert, by 2050, the country will have double the number of people over 70 compared with those aged 15-30. Apart from the social and ethical implications, the shrinking working-age population also creates a highly problematic scenario in terms of labor shortage. Japan, however, is still the second-largest developed economy in the world and, interestingly, also the second most robot-intensive economy (and the first in industrial robot manufacturing).
After WWII, automation played an essential role in Japan's economic rise, and proved to be a valuable ally in dealing with the country's demographic decline. In 2015, the Japanese government approved a document called the "New Robot Strategy" to encourage the research and development of robots in pretty much any field. The document (which can be downloaded here: https://www.meti.go.jp/english/press/2015/pdf/0123_01b.pdf) is an intriguing read.
"The hotel and tourism industries are changing, both because of the post-pandemic situation and growing automation. Big brand hotels will soon be able to cope without workers by utilizing automation. And, as robot manufacturing and RPA become cheaper and cheaper over time, automation will become very affordable for all businesses, including smaller hotels." ~ Zoltan István, Public Figure in Transhumanism and Republican candidate for US President 2020.
Я твой слуга, Я твой работник
If the idea of "replacing" biological workers with artificial ones is, if not entirely accepted, at least tolerated in Asia, it is also true that we tend to have a cognitive bias towards robotics. The Merriam-Webster dictionary defines the term "robot" as "a device that automatically performs complicated, often repetitive tasks." However, when we think about robots, we tend to rely more on pop culture. Not convinced? Close your eyes and picture the word "robot" in your mind. Done? Depending on your age, you may have seen Maria, HAL, R2-D2, Johnny 5, Optimus Prime, T-1000, Bender, or WALL-E. Did I get it right?
In Hospitality, however, the use of humanoid robots is sporadic and not (yet) particularly effective. The story of the Hen-na Hotel, in Nagasaki, is a fitting example, as the world's first robot-staffed hotel had to "fire" half of its robot workforce due to malfunction. "It's easier now," a (human) staff member stated, "that we're not being frequently called by guests to help with problems with the robots."
Robotic process automation (RPA) is way more functional in Hospitality: software (and not hardware) robots that can perform repetitive tasks otherwise done by humans. "One classic RPA use case," an interesting Red Hat blog post states, "is to automate interactions that move data between otherwise siloed applications. A bot can work within the same user interface that a human would, mimicking clicks and copy-paste actions."
“Automation in the hospitality industry is inevitable. The aging population in developed economies creates disbalances in the labor market. As a result, the hospitality industry cannot remain competitive in terms of salaries and working conditions compared to other sectors. Thus, the labor supply in the hospitality labor market is decreasing. And automation comes to the rescue to reduce the hospitality labor demand.” ~ Stanislav Ivanov, Director at Zangador Research Institute and Editor-in-Chief at ROBONOMICS: The Journal of the Automated Economy).
How does RPA apply to the hospitality industry? Here are some use cases we identified.
- According to our calculation, pre-qualifying group sales RFPs requires around 60 person-hours per month. By automatizing the task, an average hotel can generate up to 100,000 €/year in additional revenue due to faster response time, while drastically reducing labor costs;
- Managing rate codes in PMSs and GDSs requires around 100 person-hours per year. The application of RPA can increase accuracy, reduce errors down to zero, and generate up to 50,000 €/year in recovered revenue;
- Daily revenue reporting can take up to 1,000 person-hours per year. Therefore, on top of producing more precise reporting, the use of RPA can save the hotel up to 42,000 €/year in labor savings.
The Future of work?
According to McKinsey, "about 60% of all occupations have at least 30% of constituent activities that could be automated." RPA, therefore, should not be seen with techno-skepticism but with straightforward, pragmatic, entrepreneurial realism.
During his 2020 Presidential campaign, Democratic candidate Andrew Yang predicted that technological advancements (especially in the field of RPA) could result in one in three American workers losing their jobs within 2032. Yang's solution to this (presumed) work crisis was what he referred to as Freedom Dividend, which is widely known as the universal basic income. Advocates of UBI's list is ever-growing, with influential names such as Tim Berners-Lee, Mark Zuckerberg, Jeff Bezos, Bill Gates, Larry Page, Ray Kurzweil, and Elon Musk. However, data seem to suggest that companies investing in new technologies tend to hire more people than their peers who do not, so the problem of robot-induced unemployment, at this stage, is purely speculative and not backed up by any substantial evidence. Right now, the application of RPA in Hospitality (and any other industry, for that matter) has been proven to be highly effective in managing repetitive, routine, and tedious tasks, increasing the cost-efficiency and value of your hotel.
“The assumption that guests prefer the work of human hospitality workers persists in the industry. My research shows that this is often not the case. Many guests would rather not have to call the front desk in the middle of the night to ask for an extra towel. They also appreciate the greater efficiency, lower error rates, and added value of automated processes, especially if they lead to lower prices. Importantly, humans have an incredible ability to adapt to interactions with technology and frequently derive enjoyment from being exposed to novel forms of automation.” ~ Ulrike Gretzel, Senior Research Fellow (University of Southern California).
“The amount of manual, repetitive tasks in hotels today is crazy,” says Stephen Burke, Founder of Robosize ME, a hospitality-focused RPA-as-a-managed-service-provider. “So many operationally critical yet repetitive tasks exist. And those tasks require training staff when there is turnover. If all of the virtual credit cards from OTA reservations are charged by hand, for example, and the person who knows how to do it is suddenly unavailable, then either the managers need to step in, or the hotel could end up in a cash flow crisis pretty quickly. Virtual RPA robots don’t take time off, and they don’t need retraining. The more of these types of processes hotels automate, the more human staff can focus on the guest experience and guest retention, while simultaneously helping with pressure on staffing costs and ensuring consistency across operational processes.”
At a closer look, automation allows human staff to concentrate on what's really important: managing unusual situations, offering assurance, and adding humor and compassion to the interactions with guests.
Because as American humorist Evan Esar once said: "this may be the age of automation, but love is still being made by hand."