About 10 years ago, a group of some 200 Albertsons supermarkets in the Southeastern and Southwestern U.S. joined the growing legion of grocery store operators that installed self-service checkout counters, complete with item scanners, to speed up the grocery-shopping experience while cutting labor costs.
The idea sounded good in theory. DIY customers with too many items for the express line could skip the serpentine checkout lines, while grocery-store operators could trade labor costs by investments in the magic of barcodes and red-lasered self-serve scanners. Everyone wins.
Since then, though -- at least if you're like me -- a stubborn barcode reader or a produce sticker that has fallen off the side of an apple has put you in the position of pulling a harried cashier away from a nearby check stand with a full line to help you complete your purchase, leaving you with a full dose of embarrassment because your three Granny Smiths just brought a 50,000-square-foot supermarket to a screeching halt.
Two travel-industry developments from last month makes one wonder whether guests at U.S. hotels are being put in the same position.
First, J.D. Power & Associates, in its annual survey of North American guest satisfaction, said ratings fell this year in part because of declines in check-in/checkout and other labor-intensive hotel services.
Meanwhile, iPhone producer/software maker/trendsetter Apple was awarded about two dozen patents for its iTravel mobile-device app after more than two years of working on them. While Apple isn't saying specifically how it will use the patents, the website Patently Apple, which has been covering the development since the beginning, said iTravel will either include or improve electronic boarding passes and express airline check-in capabilities and will likely tie in hotel reservation booking and hotel check-in capabilities, as well.
At the heart of the matter is how effective a job hoteliers are at doing what just about every other retail-oriented industry has been trying to do for as long as anyone can remember: taking advantage of technological and communications advancements to use fewer people to do the same amount of work. In the case of hospitality, many hotels have been cutting labor, along with repair and maintenance expenses, as a way for the hospitality industry to dig itself out of a hole created by the Great Recession and its resulting plunge in travel spending.
Indeed, while the term "jobless recovery" has been thrown around loosely during the past few years, it's especially applicable to the U.S. hotel industry. Between 2001 and 2011, annual U.S. hotel revenue increased to $137.5 billion, from $103.6 billion, yet U.S. hotel industry employment during the same period fell by about 100,000, to about 1.8 million, according to the American Hotel & Lodging Association.
Do the math and the numbers become more jarring: Last year, the industry generated about $76,400 per worker, up from about $74,000 per worker for the prerecession year of 2006 and up 40% from the $54,500 per worker in 2001.
All of which makes the limited-service sector -- hotels that eliminate things like room service, bellhop service and other labor-heavy amenities -- the buzziest in the industry. (And the sector is actually bifurcated. Tack on a high-end brand and some slick room finishes, and you have "select service"; for the hoi polloi, it becomes something akin to "extended stay.")
A select-service hotel will typically have about half the number of employees of a full-service, upscale property with the same number of rooms and about a quarter of the number of workers at a luxury property. In addition, no full kitchens, dining rooms or banquet facilities means less real estate.
That's why some of the most notable hotel development announcements in some of the biggest U.S. cities have involved select-service badges, not just luxury brands. Last year, a New York developer announced a 68-story, 639-room Courtyard-Residence Inn dual-branded property that will be New York's tallest hotel-only building when it opens in late 2013.
And earlier this year, a similar but smaller Residence Inn-Courtyard dual property broke ground across the street from downtown Los Angeles' L.A. Live entertainment district. That hotel will open in the summer of 2014.
"If you own a Hampton Inn next to Times Square, you're printing money," Jan Freitag, senior vice president at Smith Travel Research, told me in May.
And while full-service upscale and luxury hotels tend to be labor-heavy, even those sectors are finding ways to use technology to cut out unnecessary costs, with some operators being more creative than others. Companies such as Hyatt and Hilton have been recently pitching lobby redesigns in which many of the front-desk functions are replaced by kiosks that guests can use to check themselves in.
And this spring, luxury hotelier Swissotel said its Chicago property completed its $10 million lobby and meetings-space renovation, which included the installation of what Swissotel called a "ghost wall." The 80-square-foot glass wall includes a 60-inch transparent touch-screen "digital concierge" that guests can use to find restaurants and other local points of interest.
Still, while some analysts might marvel at the efficiency gains, others watching the hotel industry might ask: At what cost? J.D. Power, which has been conducting its hotel guest-satisfaction survey for 16 years, said check-in/checkout and other hotel-service ratings were at their lowest since 2006, the year before the economic downturn officially began. That caused (the seemingly aptly named) Stuart Greif, vice president and general manager of J.D. Power's global travel and hospitality practice, to give hoteliers a little grief.
"As the industry continues to recover and rates increase, hoteliers need to get back to the fundamentals and improve the overall guest experience," Greif said in a statement. "Hoteliers are falling further behind and need to catch up."
Regardless, hoteliers have a choice: either take advantage of the rebound in lodging spending by going back to hiring more associates to take care of their guests, or continue to embrace technology in hopes that increasingly tech-savvy travelers get used to performing more travel-related functions on their own.
We don't know which trend will win out. But what we do know is that those 200 Albertsons supermarkets that joined the self-service checkout counter fray about a decade ago decided to scrap those machines last year.
Contact Danny King at [email protected] and follow him on Twitter.