By Scott Berman & Alec Massey
The resiliency of the U.S. hospitality industry in 2021 has been remarkable. A gradual and controlled recovery is well underway. PwC forecasts that US RevPAR for 2022 will be approximately 93% of 2019 levels. This is not a one-size-fits-all recovery, and different parts of the country are recovering faster than others; nonetheless, hotel owners and their operating partners are making critical decisions around the future operating model. For example, investments in technology are accelerating and areas such as revenue management are successfully driving pricing power whereby average room rates have been significantly higher during this pandemic than in previous downturns. Technology investments around employee and guest safety have become a priority, and a tool for staff retention at a time where labor is the defining issue in the new operating model.
Hotel ownership is demanding their management partners do more with less, to create greater operating efficiency and employee contentment. To this end, industry stakeholders are prioritizing certain technology investments and have found that deploying an Internet of Things (IoT) geolocation platform can be an unexpected source of savings.
New technology in the form of rapid response buttons are helping staff feel safer
Many hospitality executives already know that equipping their properties with IoT devices can enhance employee and guest experiences. A recent PwC survey found that respondents also believe IoT can enhance employee safety, with 43% actively investing in these technologies now, and another 33% planning to do so in the future.
Prioritizing this kind of investment is driven by many factors. The American Hotel & Lodging Association (AHLA) and the 5-Star Promise continue to spotlight safety and security standards for the industry. At the same time, local governments are legislating, and unions are supporting, improved employee safety conditions. In pre-pandemic times, properties may have had two to three room attendants per floor. Now, you may only have one. Increased isolation is a documented employee safety concern, which has the attention of the broader industry.
One of the tools that is making a difference is rapid response buttons, often enabled by IoT geolocation platforms, that allow staff to send alerts and quickly call for assistance to their location, no matter the floor, wing or room—enabling a faster response.
We are finding in markets like Chicago, Hawaii and California that deployments of this technology are truly making a difference for hotel employees. In recent months, these devices have helped in a range of situations spanning medical emergencies for staff and guests, concerning interactions between guests and hotel workers, and to quickly call support when a crime is suspected.
IoT technology is beginning to drive significant value to hotels through multiple on-campus applications
Keeping in mind that the theme of the pandemic is doing more with less, IoT technology has multiple on-campus applications. For example, in addition to employee safety buttons, the technology is being used to reduce employee time associated with tracking important assets, eliminate manual tasks like checking utility meters and equipment gauges and automate time-intensive activities like walking the perimeter to ensure all exterior doors are firmly closed.
This technology can also help achieve improved environmental, social and governance (ESG) objectives that are being prioritized by industry leadership today. For example, hotels are equipping guestrooms, meeting areas, public spaces and their back of house with IoT sensors that support new sustainability initiatives aligned with ESG roadmaps, like reducing carbon footprint.
Taken a step further, an IoT geolocation platform can be paired with occupancy sensors to detect vacant rooms and open doors. It can even automatically adjust lighting and temperature as well as help reduce HVAC runtime and energy consumption. Temperature sensors allow food and beverage managers to be alerted if a freezer begins to warm, reducing the costs of food spoilage. Water sensors can also be installed to report leaks immediately so maintenance can stop water waste and reduce the damage it causes. The applications and opportunities to create value are significant.
IoT will play a big role in the post-pandemic hotel operating model
The hospitality industry is unanimous that the recovery is well underway, but with many risks and challenges still ahead. One of the positive outcomes of the last two years has been a concerted effort by the industry to make needed investments in technology, and these investments are beginning to show that new operating models can be successful. The investment in an IoT platform for geolocation devices—and other applications—can be a core component of this change, and the foundation for addressing the theme of the pandemic—finding ways to do more with less.
Scott Berman is U.S hospitality & leisure practice leader, PwC. He has more than 25 years of experience in the field of hotel and resort development and operations and has provided consulting services in the U.S., South America, Central America, Mexico, the Caribbean Basin, Europe, the Far East and the former Soviet Union.
Alec Massey is a partner in PwC’s Connected Solutions (IoT) practice. He leads work in the firm’s largest industry segments (hospitality, gaming) and has P & L accountability for the firm’s most critical products (indoor geolocation and remote data collection).
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.