Adapting to Consumer Demands & Revitalizing Hotels


Imagine this - it's a busy holiday weekend at the hotel you own, and you and your staff are each working well over 40 hours a week integrating your skills to keep the hotel running smoothly. The phone rings every other minute with requests for food service, cleaning services, complaints about the lack of amenities, and on top of that, you have multiple people with the same requests standing in line at the front desk while others are trying to check in. It's extremely stressful having to do regular tasks while also feeling the pressure to update your hotel in order to stay relevant and keep the hotel ratings positive. These extra amenities could include on-site parking, free Wi-Fi, travel-size complimentary toiletries, hair styling tools, a pool, appliances, or an exercise facility to name a few. These items may not always be in the budget for a hotel, but it is necessary to make changes to revamp the hotel's operational structure and image. PassiveBolt offers technology upgrades by using mobile keys as a solution to cutting costs for the original key cards that have been used for decades. Taking one step toward innovation will save the hotel money, decrease the number of hours demanded by staff, and will increase the budget to allow room for improvements.

Troubles That Tie into Consumer Demands

Hotel upgrade costs are high, and so are the costs to program and buy RFID plastic key cards. The RFID costs add up and may be a key factor in why some 4 and 5-star hotels have implemented Bluetooth-based mobile keys which can be unreliable and don’t work when the phone is dead. Guests want to feel welcomed and comfortable in the place they choose to stay. The details of the troubles that tie into meeting consumer demands and other reasons that hotels have a hard time keeping up will be detailed in the following points.

  1. Hotel Facility Costs for Upkeep
  2. RFID Costs and Difficulties for Use
Hotel Facility Costs for Upkeep

As a consumer, the expenses that go into a business are often overlooked. It is easy to forget that everything, no matter how small it may seem, comes with a cost. If we take a step back and try to overview general costs for hotels, we may get a better picture of how much money is spent on each individual thing. High expenses and wasteful practices can in return cause profit margins to minimalize and can threaten a business's financial stability. Keeping hotel expenses in the budget is the key to maintaining a successful business.

Hotel Operating Expenses:

Fixed costs include expenses that generally stay the same for a long period of time. Rent/Mortgages are usually a property's largest expense. Not to mention, commercial real estate loans tend to have higher interest rates. Property taxes and other expenses such as licensing and insurance. Fixed monthly bills are also another expense, this includes Wi-Fi and cable, just to name a few. Staff salaries are an immense cost to the hotel as well, this includes the human resources departments that take care of payroll, hiring, and other legal processes. In some cases, there are also franchise fees that would apply to larger hotel chains.

Variable Costs include expenses that relate to demand and operational efficiencies that are influenced by day-to-day decisions. Inflation, especially now has caused a demand for higher wages, and that plays a part in the fluxed expenditures for hotels. Not only do hotels have to keep up with inflation, but they also have to keep up with labor market demands in relation to the hourly salary of the staff. Utility costs could take up almost 3% of a hotel's revenue. Utilities include gas, electricity, and water bills, which are used every single day. These would be considered fixed costs as the amount of gas that check-in determines the amount of gas, electricity, or water used. Sometimes, this could be a substantial amount of up to 3% of the hotel's revenue. Marketing and advertising costs are essential for keeping guests interested in staying for their business trip, family vacation, or any other occasion. This can include billboards, social media posts, or hiring an actual advertising and marketing agency.

Linen, toiletries, cleaning supplies, and food and beverage inventory are other items worth mentioning. Underordering any of these items would contribute to poor customer service and guest reviews. And to end, the image of a hotel is essentially important to guests, and costs that fit this category include landscaping, modern lounge rooms or common areas, and any form of maintenance. Technology costs will take up to our next point, where RFID key cards and programming fees could be reduced if hotels opted for mobile keys.

Hotel RFID Costs and Difficulties for Use

The average costs for hotel keys add up over time. Programming RF ID cards and additional systems that are used with the cards vary in price range depending on how big the scope of the project is, in this case, a hotel. PassiveBolt collected information on average room key costs, average keys per stay, and average nights per stay. We also included an average staffing cost of $1.39 a night. This came out to be $3.61 per room, in comparison to $0 a room if switched to NFC mobile keys solution provided by PassiveBolt. If we take a 100-room hotel, for example, the costs for maintenance come out to be $1 per room, as well as a $307 fee for installation. The installation fees include the labor, materials, and average rate for smart locks.

How Mobile Keys Can Help You Save

You may wonder how the solution of mobile keys has changed industry expectations and how converting to this solution will prevent unnecessary spending. There is a domino effect in place when you start saving money on one thing, as in return there will be more profit that can be directed towards the revitalization of a hotel. Using Near Field Communication (NFC) technology is foreseen to be used in the future, as it is a safer alternative to RFID key cards, and mobile devices will be used for years to come. The following are key points to how opting for NFC mobile keys will benefit hotels.

  1. Traveler's Heavy Reliance on Ratings
  2. Opting for NFC Over Bluetooth
Traveler's Heavy Reliance on Ratings

Travelers who are tech-savvy will do a lot of research on the Internet for the best hotels around the area that they plan to travel to. They will research nightly fees, location, and other essential needs to make sure they find a hotel that suits them. As a business owner, there is a need to keep up with a high-rating customer experience. Countless sites on the internet offer travelers an inside look at the different experiences previous guests have had at different locations. These ratings will talk about how safe they felt at the hotel, how comfortable their experience was, how convenient check-in was, and their customer service experience. NFC mobile keys provide quick check-in. The mobile keys will allow for front desk staff to save guests time, and the staff could allocate their time more efficiently to serve superior customer service. A consumer's impression is an essential part of the overall rating of the hotel. Improving a lock system and allowing mobile keys to be used will affect the ratings in the hotel's favor.

Opting for NFC Over Bluetooth

Up until now, only four and five-star hotels have implemented a mobile keys solution, but the catch is that these mobile keys are Bluetooth enabled, which comes with issues. Near Field Communication is different from Bluetooth, even though they both use mobile devices to access the room in question. PassiveBolt provides a KeyShare software stack that includes cyber security, firmware, apps, and more that allows our partners to incorporate keyless features on the locks and mobile keys. We looked into 3 popular Bluetooth mobile key companies and found a relaying issue: Bluetooth mobile keys do not work if the device runs out of battery. This misperception is often thought of when businesses want to implement NFC mobile keys. It must be noted that this will not happen as the technology is distinctive. Our NFC mobile key solution will work without cellular data or Wi-Fi, so guests will have no worries related to being locked out of their room.

Hotel costs certainly add up over time. Consumer demands may not always be as costly as a pool, but they do always cost money. By investing in a solution that could save you hundreds, if not more dollars a month, there will be a significant amount of room for opportunity and future investments.

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