Definitely Doug 11/11/22: Can Video Chat Help the Labor Shortage?

In the past few years, several product launches have introduced video chat capabilities for hotels. The underlying technologies are quite mature (thanks to the COVID-induced videoconferencing boom), and some hotels and even larger groups are now moving aggressively to implement them. Most, however, have yet to consider them. Today’s column will explore the technology, why it might or might not make sense for a hotel or group, and key considerations for evaluating solutions.

As usual, I will not make specific product recommendations. There are many generic (non hospitality specific) products on the market and depending on your situation and use cases, one of them might be quite suitable. But more commonly, the products used by hotels have been customized to address hospitality-specific needs. Within the hotel tech ecosystem, companies like Crave, Enseo, and Virdee have added video chat to some of their hotel products, and there are others. I was fortunate to engage with these three companies over the past month and had an opportunity to review their products. They address somewhat distinct but overlapping sets of use cases. The approaches and experiences they shared provide a window into this emerging technology.

Why Video Chat?

While your first reaction to video chat might be “that sounds like a marketing gimmick” (and that’s not necessarily wrong), that is not why hotels are considering it. In today’s world of persistent staffing shortage, the biggest advantages can be cost reductions and guest satisfaction. To understand the staffing implications, you need some basic understanding of call-center dynamics and how they affect the number of agents needed to handle calls.

Any contact center (whether a physical or virtual one) needs to have enough agents to handle calls without unacceptably long waits, at least most of the time. Because both the exact timing and length of calls are somewhat random, you cannot predict staffing needs exactly. If you want to avoid long hold times, you cannot schedule staff to keep them busy 100% of the time on calls; you need a certain amount of slack. Mathematical formulas applicable to contact centers (notably Erlang C) state that the greater the call volume, the less excess staff you need to maintain the same average speed of answer. Most professional call centers use such formulas to plan staffing and service levels.

In real life, what this means is that larger contact centers handling more calls will be more staff-efficient than smaller ones, with efficiency gains being significant up to a few hundred agents, after which you hit diminishing returns. From a staffing standpoint, the hotel front desk or concierge are different from large contact centers only in size: the interaction is more likely face-to-face than by telephone, but the same principle applies (fixed staff and somewhat random workload), and it is difficult to get the efficiency very high. Front desks often alternate between long lines during busy periods and long periods where there are few if any guests to serve.

Most hotels, of course, have no plans to eliminate staffed lobbies. Not all; a few European groups offer completely self-service check-in via kiosk and no onsite staff, but that is uncommon. Most hotels are, however, looking for ways to reduce staff, particularly in the current tight labor market. Hybrid approaches can do this. You will always want at least one colleague stationed at the front desk (or in the lobby, if you don’t have a front desk), and you might have more. But staffing for peak times and demand surges is challenging, and that is where video chat can be a very viable – and often cost-effective – option.

Once you implement video check-in or other services, you have staffing options you didn’t have before. Instead of only being able to hire people who live within commuting distance, now you can hire people from almost anywhere. If you need language skills you cannot find locally, you can hire from halfway around the world. You can focus your hiring on remote workers in lower-cost locales to reduce the average wage, not to mention that many people will accept lower compensation if they can work from home. And instead of struggling to meet guest expectations at an understaffed hotel, you can deliver an experience that fully meets your brand standards, in a way with which most guests have become quite comfortable.

Applications for Video Chat

Check-in is one of the most popular video chat applications today. That is because every guest must do it, the vast majority do it onsite, it is labor intensive for hotels, and the workload is subject to unpredictable peaks and valleys. A kiosk with nothing more than a video chat screen, camera, speaker, and microphone, together with a payment card terminal and keycard encoder, can enable remote staff (whether employed by the hotel, a brand, a management company, or a third party) to check in guests quickly, efficiently, and to brand standards. No application or device integration is needed at the kiosk; the remote agent just needs to be connected to the video chat system, the property management system (PMS), the keycard system, and the payment system.

Video chat can also support mobile check-in from a guest’s mobile device prior to arrival, collecting payment through the mobile app’s capabilities, and issuing either a mobile key or a code (such as a QR code) to pick up a physical keycard at a key dispensing kiosk in the lobby.

From the guest mobile phone, PC, or in-room service tablet, video chat can support calls typically handled by the hotel or central reservations office, concierge, front desk, room service, PBX, or other departments. And while check-in typically uses two-way video chat (hotels like to see the party checking in), other applications typically allow the guest to choose one-way or two-way video chat. For privacy reasons, hotel-supplied guest room tablets normally default to one-way video chat and often are configured without a camera.

What to Look For

Hotels typically have requirements that generic video chat products may or may not meet, so it is important to ask the right questions. Which of these will matter depends on whether you want to use video chat to consolidate operations within a single large hotel, within a management company or regional brand, or globally. It will also depend on what functions you want video agents to perform.

When a guest initiates a video chat, you will need to route it to an agent. In a small operation, any agent may be qualified to handle any call, but for larger ones, the best agent may depend on the location of the hotel, the language of the guest (if you know it or can take a good guess), specific training that agent may need, which agents are working, and which ones are not currently on calls. If no fully qualified agent is available when a call arrives, then the system should have flexible rules that allow you to determine whether to send the call to someone who may be adequate if not ideal, or to keep the call on hold – and this decision may depend on the expected wait time.

You may need the ability to route only certain calls to agents at under-resourced locations (such as hotels). For example, you might want top-level loyalty members to be able to get through directly to someone at the actual hotel on request or even by default, while others may only get to the front desk if they are transferred by an agent at a contact center. The routing capabilities of the system will determine whether you can configure it to your specific needs, so you need to map out the flows you want to support and make sure the product can be configured to support them.

In most hotel applications, you will want calls routed to a centralized contact center where staff can answer the most common queries easily, either directly or by consulting someone else via chat or voice. But they will still have to transfer some calls to experts, for example ones requiring deep knowledge of the hotel facilities or local areas, or fluency in a particular language. The ability to transfer calls to the right agent is therefore an important consideration.

Most video chat products do not integrate natively with hotel systems. This is a good design from a security standpoint, as it isolates the video chat vendor from sensitive information and processes. There is really no need for integration at a kiosk since it will generally have facilities the guest can use to enter personal details, to securely process payment, and to issue a room key. But even without integration, the contact center agent will need context for each video call, such as a reservation number for an arriving guest or a room number for an in-house one, and which hotel the call relates to. This is typically displayed above or next to the video window and enables the agent to look up the guest information in the PMS or other system.

For mobile video calls as with voice calls, best practices are to never ask guests to read payment card information aloud. To be sure, many contact centers still do this with voice calls, although it does present security risks particularly with agents working remotely from home. For this reason, many are now using automated means to collect payment details during a voice call to avoid exposing card details to the agent. If video calling is incorporated within a guest app that also supports payment, then a possible solution is an integration that pushes a request to the app to gather and process the payment data, typically returning a token to the PMS or other system.

Alternatively, the contact-center agent can push a payment link to the guest via text chat or email, with the link taking the user to the hotel’s third-party payment processor site. This can make it simple to collect the payment details but does require either integrations or manual processes to post the payment back to the right guest’s folio in the PMS or other system. If the necessary integrations are not available on your platform, then a simpler approach may be to avoid handling mobile transactions that require payment completely, or to guide the guest through an existing payment option within the mobile app or on the website.

Integration of systems on the colleague side can be more challenging, since a remote check-in agent (for example) needs access to the PMS and to the payment terminal in a kiosk, the keycard system, and possibly other hotel systems. However, this is no different than how a front desk works today, typically with the so-called “swivel interface” where the colleague works each system sequentially. The same can be done remotely if your hotel systems can be made available for secure remote access, as most modern ones can.

In most early-stage deployments, agents see identifying information such as the hotel, reservation number, room number, and/or guest name next to the video chat window, and then manually pull up the reservation in the PMS or other reservation system. Some larger hotel groups with more mature setups are reportedly integrating access to these systems on a single device or screen to reduce friction for agents. Typically, this involves iframes or a screen manager that organizes information from multiple systems so that they are all visible and usable by the agent in one window or on one screen. Lightweight integration approaches, such as deep links, can provide access to reservation or guest information in one window next to the video chat, to the payment application in a second one, and to the key encoding software in a third. Vendors tend to shy away from this type of lightweight integration because of strict security protocols in place for hotels, preferring that hotel groups manage the process themselves.

One very useful feature is the ability of the remote agent to share rich content with the guest. While photos, menus, and other documents can be helpful to share visually in some situations (like upselling to a better room type), in some cases they may be better delivered via a link or attachment sent by chat or email. Maps, however, are different. To provide directions to a guest room in a large resort, you might want to show the guest a map of the resort, then zoom in and use a mouse/pointer to visually show them the way – just as a front desk colleague would do in marking up a paper map.

Operational Considerations

Video chat technology is quite simple, straightforward, and cheap (many platforms offer video calls for free). And while it can absolutely save money and improve guest experience in many situations, it does come with significant operational challenges that should be considered before implementation.

First, you will need a reasonable number of video calls to achieve labor savings. A large brand or management company will have no problem getting enough volume, but smaller ones may. There is no absolute rule, because much depends on how much you expect guests to use it and for what purposes, but you will probably never get operating cost savings from running your own central video call center with less than 1,000 rooms, and in most cases you will need quite a bit more. However, you may be able to engage a third-party contact center, such as many smaller brands already use for reservations. Assuming they can share agents across multiple clients at least to some degree, cost savings will be generated based on their total call volume and will therefore be more than for a dedicated operation.

Of course, third-party contact centers will not pass all those savings along to the hotel, but they may still offer some level of cost reduction. And while dedicated operations may prove too expensive for smaller hotel groups, hybrid approaches are often possible, for example where one group of agents handles three non-competing brands.

Second, assuming you don’t outsource, you will need to rethink job descriptions, hiring practices, training, supervision, monitoring, other operational issues, and probably come up with formulas to recharge hotels for the costs. The typical hiring profiles for voice-only contact centers don’t need to consider how the candidate presents visually, but this will likely be a consideration for video agents. Voice contact centers generally have dress codes that may be too lax; they may need to write new ones for video agents (at least from the waist up). If you plan to transfer some calls to hotels for special services or knowledge, this may be a consideration there as well, particularly if those calls might be answered by back-of-house staff such as the PBX operator.

Third, video quality matters, particularly in higher-end hotels. On any device, you need a good camera and an appropriate background for the agent. Since the background is often quite challenging in a contact center or work-from-home settings, one common technique is to equip agents with green screens that mount on their chair backs, and then use a custom faux background appropriate to the brand. But even chair-back green screens may be hard to fit into often-tight call-center quarters. On the guest side, the experience of early adopters has been that it is worth investing in larger, higher quality, brighter screens – they are not much more expensive, but they are significantly more engaging to guests. The screen and the person appearing on it are representing your brand, and you want them to do so as effectively as possible.

Fourth, you will need to build out content for agents and deploy it in a quick-reference system that is indexed for rapid access to information. You want agents to be able to answer a high percentage of the questions with just one or two clicks, to maintain the illusion that the agent is in or near the hotel and knows it well.

Lastly, do not underestimate the challenges of staffing up a new contact center, even a small one. In today’s labor market, turnover in entry-level jobs is constant and quick, and you will likely find that it takes longer than you expect to get to the point where you have a stable group of agents who are trained and experienced enough to achieve cost savings. Overstretched management resources often contribute to the slow ramp-up: managers may not be able to provide the level of training, monitoring, reference material, and technology integration that are needed. These factors can delay success, which can lead to projects being judged as failures even though with a little more time they might have succeeded. It takes good planning and execution to achieve the potential benefits, and it will likely be longer than you think. Nevertheless, for those that persist, there can be a pot of gold at the end of the rainbow.

Conclusion

Hotels today face a labor challenge that may well be permanent. They need to find ways to maintain their desired brand experience with fewer staff and to expand their available labor force with remote workers where they can. Video chats are a solution that can deliver both benefits in many situations.

Video calling is a mature technology that works very well. One of COVID’s legacies is that most guests are now comfortable with video interactions, especially if there is a one-way option. Even two-way calls, such as may be required at a lobby kiosk, can seem almost as natural as dealing with a colleague at a physical front desk – and preferable to waiting in line. The technology costs are modest, and existing integrations are often sufficient to support key issuance and payment. Lightweight integrations (e.g., iframes with deep links) can simplify the colleague experience but are not usually necessary to get started.

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