Hotels across the spectrum are turning toward technology to fill gaps created by staffing shortages and wage hikes. But what began as a response to labour pressure may be creating a new reality: a two-tiered service model where luxury guests are catered to while economy guests are increasingly funneled through automation.
Some worry the result may be a widening gap not just in guest experience, but in how hospitality is defined and delivered across the various segments.
“I think the move toward automation to preserve NOI – if not done carefully and ethically – can cement a two-tier service model that reflects and reinforces broader societal inequalities,” says Enrique Lopezlira, director of the Low-Wage Work Program at the UC Berkeley Labor Center.
The rising role of tech
In both luxury and economy hotels, technology offers a clear value proposition: speed, efficiency and labour savings. But the way it’s implemented – and what it replaces – can vary widely by category.
LivAway Suites, for example, has been able to eliminate its nightshift entirely thanks to the implementation of Virdee, a straight-to-room guest-experience platform that handles 100 percent of the extended-stay hotel brand’s check-ins. This saves one to two heads per property a night, notes Branigan Mulcahy, Virdee’s co-founder.
“Guests don’t have patience for lines,” he says. “With the advent of technology like Uber and GrubHub, they now expect the option to check-in without interacting with a human.”
The problem is, automation can be both a convenience and a compromise. For some guests, skipping the front desk and heading straight to their room is a welcome upgrade.
“Room access technology has evolved to include multiple automated functionalities, which provide significant benefits to guests, staff or both,” says George Winker, vice president of sales for North America at Vingcard, an advanced technologies provider for the hospitality industry. “While the focus is often on improving guest convenience, hotel employees also gain a significant advantage by winning back time otherwise lost to manually generating and issuing keys and can instead focus on other tasks that have a higher impact on guest experience quality.”
Is that the case, however, if shifts are being cut?
On the one hand, eliminating lines and bottlenecks that come with verifying identity, remitting payment and issuing keycards can be seen as a value-add to guests. Mulcahy notes that hotels that use Virdee – which handles all three of the above-mentioned tasks – often report a 30 percent to 50 percent reduction in average check-in time.
Anneliese Vance-Sherman, Chief Labor Economist for the Washington Employment Security Department, believes many technological applications, such as mobile check-in, have become so pervasive that they’re now ingrained in guest expectations.
“I think it is important to consider that customer experiences and expectations shift over time,” she says. “Many practices, such as reduced housekeeping and mobile check-in, have become normalized for many customers and for many hotels.”
Vance-Sherman believes these automated services have become so normalized that, for many guests, they’ve morphed into genuine preferences. Hotels that don’t offer them may even experience a dip in guest satisfaction – not due to poor service, but because they fall short of expected convenience.
Still, having a screen welcome guests into a hotel may come at a cost. That cost is the loss of human connection and the personal touch that once defined the guest experience.
“Skilled, well-compensated workers improve service consistency, guest satisfaction and brand loyalty,” Lopezlira says. “Frontline staff often make the biggest impression on guests, and treating them well reflects in reviews, repeat business and revenue per available room.”
The result may be a lopsided hospitality industry.
“Uneven automation poses a real risk of creating a two-tier service model,” warns Raheel Moolji, director of investment sales at Greysteel. “Luxury properties, with their higher margins, can integrate automation alongside human touchpoints, whereas economy hotels may lean more heavily on self-service tools.”
This would be a system where value-driven assets can cut costs – and staff – through automation. One where few services are offered or expected, and the price reflects that. On the opposite end of the spectrum, freed-up human capital can be redistributed to cater to luxury guests, further enhancing services and personalized experiences.
In either case, it will be up to the guest to decide as they gain a clearer understanding of each brand’s or hotel category’s approach to service and technology.
“Economics is fundamentally about the choices people make,” Vance-Sherman adds. “Hotels create their brands based on nuances in service that help their customers know what to expect.”
The great divide
Vance-Sherman believes luxury brands will leverage technology to set themselves apart, while still relying on humans to provide the catered-to experience these guests are used to.
“They can continue to offer higher levels of service,” she explains. “If consumers are willing to pay extra for the in-person experience, the technology alternatives will be less prevalent for those brands.”
They may be less visible to guests, but that doesn’t mean tech isn’t hard at work behind the scenes. The Four Seasons Hotel Los Angeles at Beverly Hills, for example, outfitted its wellness rooms and suites with AI-powered beds that can learn a guest’s sleep support and temperature preferences, adjusting them in real time throughout the night. At the same time, these rooms receive twice-daily housekeeping service, reinforcing that the human element is essential to delivering luxury-level care.
“Those staying at high-end hotels may still enjoy personalized concierge services and tailored attention [when technology is in use],” Moolji says. “Economy hotels, meanwhile, may replace front desk staff with kiosks or shift customer service to chatbots. This can streamline operations but may also reduce human interaction for non-luxury guests, further widening the service gap.”
Mulcahy adds that platforms like Virdee aren’t meant to replace humans or the in-person customer service experience, but to enhance it. If workers don’t have to check IDs, print key cards or perform line control, their interactions with guests and time on the clock can be a lot more meaningful.
“Hotels live and die on their review scores,” Mulcahy says. “A thoughtful combination of staff supported by technology is the winning combination that will allow hotels to outcompete their peers on NPS (net promoter score) and RevPAR.”
Lopezlira agrees that balance is the right approach, particularly if the hospitality industry plans to stave off further staffing challenges and long-term workforce erosion.
“Balancing guest expectations with fair labour practices is not only possible, it’s a path to long-term value creation for investors and operators alike,” he says. “This balance can be achieved through a combination of ethical management, strategic investment and a commitment to sustainability in both business and workforce practices.”
This starts, he says, with reframing the way operators perceive labour. It should be viewed as an asset, not a cost. After all, it’s these workers who can ensure a consistent guest experience that upholds brand standards and fosters loyalty.
Technology can then support these efforts, as it will likely continue to do in the future. Mobile check-in and keycards, chatbots, smart home features, and room sensors that save energy and labour are pulling their weight, but many argue this is only the beginning of hospitality’s tech wave.
“There is still significant potential for innovation in hotel automation,” Moolji says.
He believes the next wave of integration will center on hyper-personalization, AI-driven efficiency, and the seamless integration between digital and human services. Mulcahy sees predictive service models – driven by behavioral data to anticipate guest needs – gaining traction in the near future. Ones where the tap of a digital key, for example, may trigger room service suggestions based on the time of day and guest profile. He’s also monitoring the trend of voice- or chat-based interfaces that can handle front desk, concierge or service requests.
“In the near future, automation won’t just be about doing the same things faster, it’ll be about delivering smarter, more personalized hospitality at scale,” he says.
Mike Gray, global vice president of strategic partnerships at internet connectivity and network management solutions provider Nomadix, believes the next wave of innovation could benefit all travelers – as long as operators start preparing their infrastructures now.
“There is plenty of room for new ideas, applications and products that will help a guest have a seamless experience at all brand segments, including luxury, full-service, select-service and even extended-stay,” he says. “The common theme will be lifting hardware off-site and to the cloud, thus minimizing the need for on-site tech support and maintenance. The results are better uptime and lower costs. It will be a delicate balance of introducing this technology and the comfortability for guests and staff alike.”
Part of preparing one’s infrastructure is also preparing the workforce. Preparing them for new responsibilities and touchpoints as tech takes on the mundane. Preparing them to support the personal preferences and customized solutions tech can flesh out.
“The answer is not to resist technology outright, but to deploy it equitably,” Lopezlira says. “This should be done while creating and preserving good-quality and meaningful jobs that ensure every guest – not just luxury travelers – benefits from human-centered service.”