Can tech be the answer to hospitality industry’s manpower crunch?

Hotels and restaurants are scaling back their operation, with hotels facing lower occupancy rates due to a lack of room attendants and food and beverage establishments reducing hours to cut costs.

These adjustments stem from a manpower shortage, an issue that has plagued the industry even before the onset of COVID-19. Employees are often discouraged by the physically demanding work, low pay, and poor working conditions. The lack of staff has made the labour market more competitive for businesses and further complicates their ability to retain skilled employees.

Recognising the urgency for evolution, Chris Teo, the Second Vice-President of the Singapore Hotel Association, emphasised that the industry must undergo transformation due to its traditional reliance on manual labour and its characterisation as a low-tech service sector.

To confront these challenges, substantial initiatives have been undertaken. In 2023, the Singapore Tourism Board (STB) and Workforce Singapore collaborated to create a Job Transformation Map (JTM) for the hotel sector. This initiative provides employees with access to programmes for skills enhancement and job transformation.

Additionally, at the beginning of the year, new Progressive Wage Model (PWM) recommendations were introduced to address wage disparities for employees. These recommendations are set to benefit 41,000 employees in the food services sector, including 17,000 full-time lower-wage employees.

Moreover, organisations have been proactive in instituting new policies to ameliorate employee working conditions. For instance, Din Tai Fung has recently transitioned to a five-day workweek, offering employees two additional rest days per month than previously. The Chinese cuisine restaurant chain has also established rest lounges for employees, aiming to boost talent retention.

Beyond enhancing working conditions, organisations are exploring innovative solutions to mitigate labour shortages. One strategy includes the integration of AI into everyday operations, signalling a shift towards more technologically driven approaches to address industry challenges.

AI can bring about several positive changes, leading to enhanced guest satisfaction. For instance, organisations can use AI to relieve employees of mundane tasks, allowing more time to focus on providing personalised service to the guests, finding ways to delight them, and problem-solving complex and trickier issues. Some time-consuming and repetitive tasks that can be transferred to an AI system may include taking voice or text reservations, making area recommendations, managing inventory, optimising restaurant table layouts, and pricing hotel rooms.

Additionally, AI can collect and process data to provide instantaneous information and feedback, allowing employees to respond quickly to guest questions with accurate and up-to-date information. Relying on AI also frees up management time to focus on the bigger picture and maximise opportunity.

Employing AI systems, including chatbots in websites and smartphones apps, ensures that guests with simple queries can get assistance at any point without delay, and employees can then handle the more challenging queries that still need the element of human touch. Leaving on the more complex questions to employees allows them to spend more time talking to the guests to get a satisfactory resolution, increasing the guest experience. Chatbots are not designed to replace humans but instead answer simple questions that do not need a human element.

AI systems can not only perform repetitive tasks but can also go further to have a direct impact on improving guest satisfaction with suggestive recommendations. With predictive analytics tools such as association rule mining, AI systems can learn and make predictions on what the guest will desire based on their previous purchase history and what previous guests have purchased, allowing the system to make suggestions on retail products, room upgrades, spa services, or what wine would be a good pairing in a restaurant. Having AI systems provide employees the knowledge of what would increase the guest’s satisfaction allows for the upselling of specific items that the guest will ultimately benefit from.

“A common misconception of AI systems is that they are designed as cost cutters to replace human roles; however, the overwhelming majority of AI systems are not intended to eliminate jobs but provide a supporting element.” – Dr Guy Llewellyn, Assistant Professor, EHL Hospitality Business School

A common misconception of AI systems is that they are designed as cost cutters to replace human roles; however, the overwhelming majority of AI systems are not intended to eliminate jobs but provide a supporting element. Though, there are time when they replace employees as AI and casino floors, or order to hotel rooms. They reliably cut the lawns and vacuum the carpets. While these jobs were eliminated, it also opened other job opportunities. While robots currently perform basic tasks, they also need regular preventative maintenance; while replacing some positions, they create others. While these new jobs will most likely be a net deficit, they allow employees the opportunity to learn a new skillset that is in demand in the market.

Adopting AI systems also provides other opportunities for jobs not considered in the past, including data scientists and positions designed to create and execute data governance policies. As AI systems need to be trained before they can be useful, courses in data analytics and computational thinking are a growing necessity. Data governance, ensuring that the data collected is being used for its intended purpose and that guests have ownership of their data, is an increasing concern with recent data breaches and is becoming necessary in all hospitality sectors.

One important aspect amongst all of this is ensuring the hospitality employees are skilled on how to use latest technologies including AI to their benefit through trainings while expanding their understanding and fostering adaptation. This is imperative to ensure that humans and technology co-exist to set the stage for the best hospitality has to offer.

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AI systems need to be implemented in all aspects of the hospitality industry and celebrated as they are placed online. Most AI systems are not a replacement for humans but a net positive by removing mundane and time-consuming tasks, allowing employees to pivot and refocus on providing the personalised service that the guests are looking for. The utilisation of AI in the hospitality sector is in its infancy; the future AI systems will become more sophisticated and precise, and organisations in Singapore need to include the current technologies in the workforce to begin the transformation and acceptance of AI as a coworker.

About the author: Dr Guy Llewellyn is Assistant Professor at EHL Hospitality Business School.