March 19, 2005

Hotel Check-in Kiosks

Marriott Talks About Check-In kiosks and advantages of.

March 19, 2005 08:27:00 AM ET

By Jui Chakravorty

NEW YORK (Reuters) - Self-service kiosks in hotel lobbies, which let travelers bypass the front desk at check-in, will eventually help hotels stem rising labor costs by enabling them to serve guests with fewer staff.

Marriott International (MAR) will roll out the kiosks this summer, allowing guests to check in, get key cards and check out without interacting with hotel staff.

``Eventually, the kiosks will likely result in some cuts at the front desk,'' Chairman and Chief Executive Officer J.W. Marriott, Jr., said in an interview at a Marriott conference of general managers last week in Orlando.

Starwood Hotels & Resorts Worldwide Inc. (HOT) and Hilton Hotels Corp. (HLT) properties already have self-service kiosks and plan to add more.

Marriott's kiosks, initially planned for urban, full-service hotels, also allow customers to change rooms, beds and length of stay. And, the kiosks are designed to be compatible with a system that would let air travelers print boarding passes while checking out of their hotel.

Hilton was the first to launch the kiosks early last year. With 102 kiosks in 42 hotels, they have so far been ``very successful,'' Hilton spokeswoman Kathy Shepard said.

``We plan to put 120 kiosks in an additional 100 hotels this year,'' she said, adding that they would be at the Hilton and Doubletree brands.

Hotels have been introducing self-service check-in in large, urban areas that cater to business travelers, already comfortable with the convenience of express checkout. ``Clearly the business traveler is an earlier adapter of self service,'' said Tom Conophy, chief technical officer at Starwood Hotels & Resorts Worldwide, whose brands include Sheraton, Westin, St. Regis and W Hotels.

Starwood, which placed some kiosks at its Sheraton properties in 2004, is planning to have more in place at 100 Sheraton hotels in North America by the end of this year.

Even though the kiosks are not intended to replace the front desk, ``it is possible they will lead to some labor cost savings over time,'' Conophy said. ``It would depend on overall adaptation to the kiosk technology.''

If front desk staffing is cut back, those employees will likely be ``repurposed'' into serving guests in other ways, Conophy said. ``We would look at staff we have now take on different roles, such as lobby ambassadors.''


Labor has been a growing issue for large U.S. hotels, many of which have faced protracted labor disputes from unions pressing for higher wages, better working conditions, shorter contracts and better healthcare benefits.

While union activities have failed to put a damper on a strong profit recovery in the hospitality industry, wage increases are looming as one of the biggest challenges facing hotels in the coming year.

Labor makes up 45 percent of hotel operating expenses, according to the Atlanta office of hospitality consultants PKF Consulting.

Expenses -- payrolls, benefits and training -- are rising faster than inflation rates, PKF said, with labor costs per available room climbing to an estimated $13,834 in 2004 from $12,540 in 2002.

At the Orlando conference, Chief Executive J.W. Marriott, Jr. called labor and utilities ``dark clouds'' over the industry.

Deutsche Bank lodging analyst Marc Falcone, who recently named higher labor rates the ``biggest single risk to hotel stocks,'' says the kiosks will have little impact on unions in the near future.

``My guess is that the union could use it as a negotiating point for job security and wage rate, but not in the near term,'' he said in an interview.

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Posted by keefner at March 19, 2005 09:07 PM