Tourism demand is soaring around the world as the COVID-19 pandemic is coming to an end. The Japanese government has also relaxed border measures, and inbound tourists have begun to visit the country. Meanwhile, the shortage of manpower in the hotel industry, which had been overshadowed by the corona wreck, is beginning to be viewed as a problem again. While various fields are making trial-and-error efforts to solve problems, the need for digital transformation (DX) is attracting attention as a way to solve the labor shortage at accommodation facilities. In this article, we will introduce the actual situation of labor shortage in the hotel industry in the post-COVID era and the empirical cases of DX to solve the labor shortage.
With the effects of the pandemic revival, the problem of labor shortages is once again becoming a problem throughout Japan. According to a survey by Teikoku Databank, as of October 2022, 51.1% of enterprises are feeling a shortage of workers, almost returning to the level before the pandemic. Among them, the “Travel/Hotel” industry has 65.4% (full-time employees), which is the second highest after the “Information service” industry (69.1%), and the problem of the labor shortage is becoming serious. As for non-regular employees, three-fourths of the companies in both the “restaurant” and “travel/hotel” industries felt a labor shortage. [Source:]
One of the reasons for this labor shortage is the high turnover rate in the hotel industry. According to the Ministry of Health, Labor and Welfare’s “Overview of the Results of the 2021 Employment Trend Survey,” the lodging and food service industry has the highest number of new hires and quitters, and the highest turnover rate. This high turnover rate is due to chronically low wages and long working hours across the industry. The lodging industry operates 24/7 and is said to be a never-ending service industry in Japan. Wages for that are also below the average annual income in the country, and the current situation is that there is no end to the number of people leaving their jobs. With the tourism industry as a whole facing the problem of labor shortages, the Japan Tourism Agency has been offering discounts on travel fees and regional coupons since October this year, with the aim of stimulating tourism demand. It has been decided that the deadline for this project, which was set to be the end of this year, will be extended to 2023 with changes to the content.
In addition to the rise in demand for domestic travel, the number of inbound tourists has also increased significantly due to the resumption of acceptance of package tours without a tour conductor for foreign tourists from September. Due to the impact of the pandemic, the number of foreign visitors to Japan, which had declined to a negative growth rate until last year, will increase 20 times compared to the same month of the previous year in October 2022 [Source:] resulting in a rapid increase in inbound demand. The number of tourists visiting Japan is expected to increase further toward the year-end and New Year holidays.
Due to the rapid increase in tourism demand mentioned so far, the problem of labor shortage is easily expected to become more serious, and the industry as a whole is devising all possible measures to solve the labor shortage. As one of them, the expansion of foreign workers and non-regular employment is required, but the current situation is that many accommodation facilities are forced to struggle to recruit. Under such circumstances, DX (digitalization) of accommodation facilities is attracting attention not only for solving the labor shortage, but also for realizing non-contact, which has been attracting attention due to the pandemic, and various other possibilities.
Resolving the labor shortage through DX is not something that can be done simply by reducing the number of employees. By automating repetitive tasks such as check-in/check-out and room service orders, DX can greatly reduce the burden on employees. By using the cost to improve service quality and improve the accommodation experience, we can not only overcome the problem of labor shortage, but also improve the operational efficiency and guest experience of the accommodation facility as a whole, which will lead to an increase in revenue as well.
The Aiello Voice Assistant (AVA) provided by Aiello is a voice AI solution developed with a focus on the chronic labor shortage problem faced in the hotel industry, and supports guests as a 24-hour virtual staff. In addition, all AVA services can be completed in the guest room, and as a savior of the hotel industry, which has come to require non-contact due to the pandemic, it has attracted attention even during the pandemic. Since 2019, AVA has been deployed in over 60 hotels and over 6,000 rooms, answering over 12.5 million inquiries from 1.5 million users in Chinese, Japanese, Thai and English.
Hotels that have actually implemented AVA have seen an average of 60% reduction in front desk operations. Among them, InterContinental Kaohsiung, where all 253 rooms are equipped with AVA, saved 372 hours of working hours by answering room service and FAQ (frequently asked questions), which is the main function, and converted to about $110,000 in reduced costs. (15 million yen), and has succeeded in significantly reducing the work burden on the staff.
In addition, AVA supports four languages: English, Chinese, Japanese, and Thai, so there is no need to look for personnel who can speak foreign languages. In addition, information input in a foreign language is automatically translated on the system, so when the staff receives an order for room service, etc., it is possible to respond in the local language.
Guests can use the AVA in their rooms as below:
“Hello AI, bring me some water”
“Hello AI, I’m out of toilet paper”
Guests can order room service just by talking to the AVA, and when the order information is transmitted to the staff online, the room service can be completed seamlessly. In the past, guests would have to call the front desk to place their orders, but the system can complete all room service processes, since there is no need for the staff to record and communicate orders.
Regarding FAQs, guests can ask AVA about the hotel and sightseeing information around the hotel, and AVA can answer it, so it is possible to eliminate the repetitive work of the staff, and the time that was generated there can be used to operate other tasks.
For example, guests can ask:
“Hello AI, what time is the check-out time?”
“Hello AI, where can I have breakfast?”
“Hello AI, what’s fun around here?”
Guests can get all kinds of information about accommodation and sightseeing by talking to AVA. These measures not only reduce the workload of the staff, but also lead to an improvement in the overall quality of the stay, which is expected to further improve the guest experience.
As tourism demand is expected to further increase in the future, there is no doubt that the problem of labor shortages will become a problem that the hotel industry as a whole needs to improve. In the hotel industry, where improvement of the accommodation experience is always required, updating technology not only increases the brand value of the hotel itself, but also is the best way to directly solve the problem of labor shortage. Further acceleration is expected.
Automating the constant high volume of questions and room service requests from guests to free up time to improve service is critical for staff to maximize their skills. AVA’s voice AI technology can achieve these goals, helping lodging facilities overcome the problem of labor shortage and improve the lodging experience.
For sustainable hotel management, hotel DX will likely attract even greater attention in the future.
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