Are robots coming to a hotel near you?
— 13 experts shared their view
A recent University of Houston report on robots in hospitality claims that by 2030 over a quarter of hospitality jobs will be replaced by robots. Will robots ever replace all humans in hospitality? Next-gen technology will undoubtedly replace mundane, repetitive, and dangerous jobs in hospitality performed by housekeepers, porters and baggage handlers, concierges, security guards, line cooks, room service, bartenders, waiters, etc. Some hoteliers claim that hospitality is an industry of "people serving people" and robots will be playing only a marginal role. Others, citing the high labor costs which constitute as much as 50%-84% of overall hotel costs in these low travel demand, low occupancies era, predict that robots will replace humans in all dangerous, repetitive and mundane jobs at the property.
The question is, are robots coming to a hotel near you anytime soon?
Founder and Editor-in-chief of ROBONOMICS: The Journal of the Automated Economy
To buy or to rent a robot? That is the question.
Robots are actively entering hospitality services. Hotels, restaurants and bars use them for cleaning, provision of information, room service delivery, as receptionists, waiters, bartenders, cooks, etc. Although hospitality is largely regarded as peoples' business, high tech is invading this human bastion, promising to disrupt the hospitality business. A major question that hospitality companies face is whether they have to buy or rent the robots they use in operations. The company needs to take a decision after or simultaneously with the decision to implement service robots. Each of the two options has advantages and disadvantages that need to be considered.
Buying the robot provides flexibility because the company would own the robot and can use it as it finds suitable. Additionally, from a financial perspective, owning a robot means that the company can depreciate it and decrease its taxable profit. At the same time, buying a robot requires significant financial costs – upfront costs for the purchase, costs for the (development of the) software to be used in the robot, annual insurance costs (for damages on the robot as an asset and damages caused by the robot to guests and employees and their property), and monthly costs for the maintenance. Furthermore, the company would need to ensure that it has employees or a contract with an external provider who can repair the robot when it malfunctions. Finally, the rapid technological development may make the robot outdated very fast which may put the company in a situation when it has a robot that has not been fully depreciated but it is already outdated.
Renting a robot (Robot-as-a-service, or RaaS) makes the lives of hospitality managers easier. The company does not need to deal with robot repair, software updates, etc., because they are the responsibility of the robot owner – the leasing company. The fact that the company needs to pay a monthly fee for renting the robot allows a direct comparison of the costs for the robot to the labour costs for the tasks performed by the robot. Thus, the company can evaluate the robot's cost efficiency easily. Moreover, when the rental contract expires, the company has the option to renew it or not depending on whether the robot met the company's expectations not only in terms of costs and productivity but in regard to the customers' and employees' experience of being served by / using the robot. On the negative side, the monthly rental payments are higher than the monthly maintenance costs the company would make if it buys the robot.
Overall, renting a robot seems like a better option for hospitality companies. Besides the financial advantages, it allows them to focus on their core competence to deliver a high-value hospitality experience to the guests.