Maximising productivity is something all businesses strive for. Measuring it and finding ways to improve it, however, isn’t always a simple task, depending on the industry. In manufacturing it may be as simple as knowing how many units need to be produced per hour and figuring out why this isn’t being met or how production can be optimised to increase the standard.
In hospitality there are many more variables to track, many more theories for improvement, and many more ways to measure results. So it’s a difficult task for hospitality businesses, hotels in particular, to tackle with any degree of confidence.
People1st undertook a study in the UK to evaluate current attitudes towards hospitality productivity and discover ways businesses can approach the issue. There findings are summarised below.
What is productivity in the context of the hospitality industry?
In simple terms productivity is measured by how many outputs are generated from how many inputs. So productivity can be increased in a number of ways such as:
- Maintaining input but increasing output
- Increasing input and increasing output
- Decreasing input but increasing output
The challenge in the hospitality industry is deciding how to define outputs. What’s the best value to accurately gauge how productive a business is? It could be number of customers, average spend per conversion, how much return business is gained, customer satisfaction etc.
Currently the UK has an unemployment rate of below 5% and productivity in the hospitality industry is growing quickly, but still well below that of other industries – for example it’s still three times lower than manufacturing.
In this instance, productivity is measured by ‘Gross Value Added’ (GVA). Since 2008, GVA across the UK hospitality and tourism sector has increased from £35 billion to £53 billion.
In an industry that is built on human to human interaction, managing the productivity levels of your business is a challenge for any hotel owner or manager.
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What are the main causes for lower productivity in the hospitality industry?
In many industries technology and automation can really increase productivity while also reducing costs. This is where manufacturing benefits. In hospitality it’s not so simple. It’s an industry that is built on people-to-people interaction, and also involves a huge variety of tasks and skills within one business, hotels in particular. Understanding what needs to change is one thing, and predicting how customers might react to certain changes is another. Reducing authenticity in such a service-based industry could be dire.
Rising costs, recruitment difficulties and changing employee attitudes mean productivity is increasingly hard to get on top of. Stressful work with low levels of flexibility and autonomy is a critical factor leading to hundreds of thousands of workers dropping out of employment every year.
Figures suggest that 37% of workers were stressed always or often in 2012, compared to 28% in 1989. On top of this 11.5% of the hospitality workforce are on zero-hour contracts, meaning the employer is not obliged to provide a guaranteed minimum number of working hours for the employee.
Obviously, skills are a vital factor when it comes to increasing productivity. Unfortunately hospitality and tourism has one of the highest levels of skills gaps of any sector. In 2015, 18% of hospitality and tourism businesses reported their staff lacked the necessary skills to meet their business needs, either because they hadn’t completed adequate training or were new in their position. The seasonal nature of the industry is a big factor here. Currently, 35% of the hospitality and tourism workforce is under 25, while 16% are full-time students.
What hospitality businesses do to tackle productivity?
Technology is, arguably, always the way forward. While there are debates around how much technology and automation is a good thing within places like hotels, it’s important to look at it from multiple perspectives. The increasing adoption of technology may not erode the level of customer service, but simply change the way staff work, making it easier for them to manage tasks and guests.
Here are some important considerations for your business:
- Technology can be your friend
Think carefully about what technology may suit your hotel and where it can be best employed. Clear examples of where it might increase your productivity is using a property management system, channel manager, or point-of-sale system to reduce the amount of man hours you have to spend on overseeing these processes manually. This doesn’t have to affect the amount of staff you hire, instead it might mean you can distribute more of their time on the guests themselves. For customer-obsessed businesses like hotels, this is ideal.
- Prioritise the right business focuses
You need to understand what strategies will work best for you and what exactly it means for you to be productive. Should you think more about converting guests to upgrades and promotions? Do you want to create a legacy of return business and stellar customer satisfaction? Or are you more focused on staff being as efficient and skilful as possible? Figure out where your greatest benefit is coming from and conversely where you seem to be lagging, and make plans around how to make the most of each.
- Understand how the structure of your business affects productivity
Sometimes all it takes to increase productivity at your hotel is a simple restructuring of the way you work. This might mean looking at staff scheduling to make sure there is sufficient staff to meet demand. This is equally relevant to ensuring there are enough staff to deliver customer satisfaction as it is to reduce costs by not having too many staff on duty.
Of course, any changes you make need to be rolled out easily, quickly, and at low cost, or at least be cost effective in the long-run. A vital fact to realise is that these days there is technology created in every segment, specifically designed to make things easier; scary as it may seem at first.