Research/Reflection Paper

San Francisco State University, College of Business, Department of Hospitality and Tourism Management

HTM 561 – Hotel Operations Management

Assignment – Technology's Impact on the Hotel Worker and Unions

Assigned Article(s):

Hotel Workers Fret Over a New Rival: Alexa at the Front Desk Sept. 24, 2018 – By Eduardo Porter

The bosses haven’t yet introduced facial recognition technology at the Royal Hawaiian Hotel. But from her perch behind the front desk at the pink neo-Moorish palace overlooking Waikiki Beach, Jean Te’o-Gibney can see it coming.

“Marriott just rolled it out in China,” enabling guests to check into their rooms without bothering with front-desk formalities, said Ms. Te’o-Gibney, a 53-year-old grandmother of seven. “It seems they know they will be eliminating our jobs.”

Similar fears simmer throughout Marriott’s vast network of hotels, the largest in the United States. Over the last two weeks, Ms. Te’o-Gibney and thousands of other Marriott workers — cooks and cashiers, bellhops and housekeepers — have voted to authorize their union, Unite Here, to strike at dozens of locations from Waikiki to Boston and San Diego to Detroit.

Alongside the usual demands for higher wages and better workplace safety, the union is bringing another issue to the table, asking for procedures to protect workers affected by new technologies and the innovations they spur.

The bosses haven’t yet introduced facial recognition technology at the Royal Hawaiian Hotel. But from her perch behind the front desk at the pink neo-Moorish palace overlooking Waikiki Beach, Jean Te’o-Gibney can see it coming.

“Marriott just rolled it out in China,” enabling guests to check into their rooms without bothering with front-desk formalities, said Ms. Te’o-Gibney, a 53-year-old grandmother of seven. “It seems they know they will be eliminating our jobs.”

Similar fears simmer throughout Marriott’s vast network of hotels, the largest in the United States. Over the last two weeks, Ms. Te’o-Gibney and thousands of other Marriott workers — cooks and cashiers, bellhops and housekeepers — have voted to authorize their union, Unite Here, to strike at dozens of locations from Waikiki to Boston and San Diego to Detroit.

Alongside the usual demands for higher wages and better workplace safety, the union is bringing another issue to the table, asking for procedures to protect workers affected by new technologies and the innovations they spur.

Many earned too little to justify large capital costs to replace them. A typical hotel or motel desk clerk earns just over $12 an hour, according to government data; a concierge just over $13.50. And many of the tasks they perform seemed too challenging to automate. Technology is changing this calculus.

There is no equivalent measure on the penetration of software systems like Alexa or touch screens in the workplace. But in 2014, automakers in the United States had 117 robots for every 1,000 workers, according to research by the economists Daron Acemoglu of the Massachusetts Institute of Technology and Pascual Restrepo of Boston University. In service businesses, there were virtually none. But with advances in machine learning and other innovations in information technology, many service jobs are now potentially in jeopardy. Compared with manufacturing, the investment needed to automate some tasks in the hotel sector — like front desk or concierge services — is likely to be relatively low.

Maria Mendiola, a concierge at the San Jose Marriott, frets that Amazon’s agreement to deploy its Echo device in hotel roomsacross Marriott’s properties will eventually make her position pointless. “Alexa might do my job in the future,” she said. At the Sheraton Waikiki, next to the Royal Hawaiian, cashiers at the beachside lounge worry about a newly deployed computer system that will allow servers to close out their own checks — making cashiers redundant. There are automatic dishwashers on the market; machines to flip burgers and mix cocktails; robots to deliver room service or help guests book a restaurant reservation. New technologies are reconfiguring the workplace in other ways. Doormen are losing tips as guests turn to Uber and Lyft instead of regular taxis. So are bellhops when guests use Seamless, a food-delivery app, instead of room service. How many jobs will technology take out? Hoteliers have yet to figure out how guests will react to a more tech-heavy experience. A Marriott spokeswoman said in a statement that the chain was not deploying technology to eliminate jobs but was “personalizing the guest experience and enhancing the stay.” Cliff Atkinson, senior vice president for hospitality at MGM Resorts, said new technologies had changed job descriptions at properties across his chain but had not eliminated jobs. Front-desk clerks displaced by automated check-in kiosks are deployed as “lobby ambassadors” or concierges. Still, history suggests that the most powerful motivation to deploy new technologies has been the opportunity to reduce labor costs. From 1993 to 2007, Professors Acemoglu and Restrepo estimated, each new robot cut 5.6 jobs and reduced wages by 0.5 percent.

As technology gets better and cheaper, there are lots of new tasks it could take over. “It is a new, uncharted area for our company and our industry as a whole,” Mr. Atkinson said. “We have talked about one or two brands being fully automated and self-service for the guest.”

David Autor, an economist at M.I.T., says it is plausible to foresee a future in which — as airlines have done — hotels deploy humans to tend to elite guests and automated systems for everybody else. Workers generate costs well beyond their hourly wage, Professor Autor argued. They get sick and take vacations and require managers. “People are messy,” he noted. “Machines are straightforward.”

Last year, the McKinsey Global Institute issued a report projecting that technology would drive a 30 percent decline in jobs in food service and lodging from 2016 to 2030. That’s almost on a par with the 38 percent decline in manufacturing jobs from 1960 to 2012.

Unions would rather not have manufacturing’s story repeat itself in the service sector. “We are trying to get ahead of that,” said Anand Singh, president of Unite Here’s local in San Francisco. “We are not Luddites, but we are seeking a real voice at table.”

The International Brotherhood of Teamsters is also worried about technologies hurtling into the present. As it squared off for contract negotiations with United Parcel Service this year, the union put a bold proposition on the table: to prohibit using drones or autonomous vehicles to deliver packages. But in September, when the union sent the agreement to members for a ratification vote, there was no such provision. Edward

Wytkind, who until this year headed the Transportation Trades Department of the A.F.L.-C.I.O., said unions could not stop technology if they tried. “Maybe you can stop it through one round of bargaining or slow it down,” he said. “But innovation has been going on for 100 years and has never stopped.”

And he noted what might be the cost of success: “Are we winning a future for workers? Not if the company goes out of business.” A better strategy might be to demand a say in how technology is deployed.

The Teamsters’ tentative deal with U.P.S., for instance, calls for six months of advance warning to the union of technological deployments and for the creation of a committee with union and company representatives that would negotiate “regarding the effects of the proposed technological changes.”

Unite Here is following a similar path. Mr. Singh listed the union’s goals for Marriott contracts: “We want to talk about how technology can assist the work we perform and ease the rigors of our work, how our members are trained, what happens to workers who

would otherwise be tagged as redundant, how our members are repositioned to succeed or hired into other workplaces.”

In June, the union managed for the first time to include protections from technological change in its contracts covering workers at the Las Vegas properties of MGM Resorts and Caesars Entertainment. Workers will be trained to do jobs created or modified by new technology, allowing them to share in the productivity gains. The contracts also provide for the company to try to find jobs for displaced workers. But the union’s key achievement was to get 180 days’ warning of technological deployments.

“They have to let us know and show us the prototypes and must negotiate with us,” Mr. Taylor said. “At the end of the day, they can move forward, but this gives us time to understand the effects.”

If they could choose a precedent from American labor history, today’s union leaders might follow the path of the International Longshore and Warehouse Union.

In the 1960s and ’70s, dockworkers were walloped by one of the most revolutionary technical innovations of the 20th century: containers. At a stroke, containers slashed both the time and number of workers needed to load a ship, saving vast amounts of money.

Instead of trying to stop the big boxes, the union covering the longshoremen on the West Coast demanded a share of the spoils: rich retirement packages for workers who were let go, and hefty remuneration for those who stayed. As a result, longshoremen working full time, year round, now make $168,000 to $186,000 a year on average.

But you need a lot of power to get a deal like that. The longshore union could shut down ports at will, imposing huge costs on shippers. For workers lacking that kind of clout, the gains achieved by the longshoremen seem out of reach.

Unite Here is not powerless. Nationwide, only 7.6 percent of workers in the accommodation industry are unionized, according to government statistics. But in San Francisco, for instance, Unite Here represents 89 percent of workers at Class A hotels. That’s partly why housekeepers in San Francisco make $22.64 an hour, the union notes, more than double the national median of $10.09.

Unite Here’s victories so far have been hard won. “It was not an easy ask,” Mr. Taylor said of the language on technology in the Las Vegas deals. “It does infringe on hotels’ right to do what they want.”

The outcome might or might not deliver a greater share of the gains from technology to workers. But front-desk clerks and concierges will have better options than severance when Alexa or computer software takes over some of their tasks. “It was a good resolution,” Mr. Taylor said. “Time will tell if it is good enough.”

A version of this article appears in print on Sept. 24, 2018, Section A, Page 1 of the New York edition with the headline: Hotel Workers Fear the Robot at the Front Desk.

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INNOVATION

Hilton Introduces Digital Key, Further Enhancing Industry-Leading HHonors App

Keyless entry empowers guests to further customize their travel experience from their smartphone

August 11, 2015

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MCLEAN, Va. - Hilton Worldwide (NYSE: HLT) today introduced Digital Key, an all-new feature of the Hilton HHonors app, providing the loyalty program's members more choice and control over their entire travel experience. Digital Key now gives frequent guests the option to bypass the hotel check-in

Since Hilton's introduction of digital check-in with room selection last July - an industry first - HHonors members have digitally checked-in more than 5 million times to date. Credit: Hilton

Worldwide.

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counter and access their rooms, as well as any other area of the hotel that requires a key, directly via the Hilton HHonors app on their smartphones. By early 2016, HHonors members will be able to use their smartphones as their room key to enter more than 170,000 rooms at 250 U.S. properties within the Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy by Hilton brands.

Since Hilton's introduction of digital check-in with room selection last July - an industry first - HHonors members have digitally checked-in more than 5 million times to date. In that same time period, the HHonors app has been downloaded more than 2 million times, and customer feedback on digital check-in has been overwhelmingly positive, with 93 percent of guests saying they've felt satisfied or extremely satisfied with the experience.

"HHonors members can use digital check-in and room selection at more than 4,100 properties globally - and those who have used it have shared exceptional feedback," said Geraldine Calpin, senior vice president and global head of Digital, Hilton Worldwide. "With Digital Key, we are making the guest experience even more seamless through our improved mobile app."

The Hilton HHonors mobile app provides a number of benefits to members of the program who book directly though the app, Hilton.com, the Hilton reservations call center or via Hilton's corporate travel partners. In addition to checking in digitally, selecting their own room from a floor plan or list and using their smartphone as their key, members can further customize their stay via the app by requesting amenities - like extra pillows, snacks or drinks.

"Through our app, we're giving HHonors members the ability to better control and personalize their stay with us," said Calpin. "Imagine if an HHonors member is arriving at our hotel after a long trip or running late to a meeting, Digital Key can provide our frequent guests the added benefit of going straight to their room without stopping at the front desk."

Digital Key provides guests with an additional convenient and secure way to access their room. Beginning the day before arrival, HHonors members who booked directly with Hilton may select their desired room on their mobile device using digital check-in and will be asked if they'd like a Digital Key during their stay. If the guest elects to use a Digital Key, it is issued as soon as the guest's room is ready the day of their arrival.

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When Diamond, Gold and Silver HHonors members arrive at the hotel, they can head straight to their room - without stopping at the front desk* - since they already digitally checked-in through the HHonors app. When the guest approaches their hotel room, they can simply press the virtual "unlock" button on the app to unlock the door.

Digital Key beta testing commenced earlier this month at the Hilton Alexandria Old Town in Alexandria, Va., and will continue through 2015 at select U.S. properties across four brands including Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and Canopy by Hilton. Digital Key will first be available on the iOS platform and, later this year, it will be o�ered to Android users.

In addition to receiving other benefits like free standard Wi-Fi when booking directly through Hilton, HHonors members who use the Digital Key this year at beta hotels will receive 2,500 Hilton HHonors Bonus Points.

The Hilton HHonors loyalty program is open to all guests and free to join - visit here for enrollment information. HHonors members always get our lowest price with our Best Price Guarantee, along with HHonors Points, free standard Wi-Fi, access to digital check-in and Digital Key, and no hidden fees, only when they book directly through Hilton.

*Where available and allowed by local law

About Hilton

Hilton (NYSE: HLT) is a leading global hospitality company with a portfolio of 17 world-class brands comprising nearly 6,000 properties with more than 954,000 rooms, in 117 countries and territories. Dedicated to fulfilling its mission to be the world’s most hospitable company, Hilton earned a spot on the 2019 World’s Best Workplaces list, and has welcomed more than 3 billion guests in its 100-year history. Through the award-winning guest loyalty program Hilton Honors, more than 100 million members who book directly with Hilton can earn Points for hotel stays and experiences money can’t buy, plus enjoy instant benefits, including digital check-in with room selection, Digital Key, and Connected Room. Visit newsroom.hilton.com for more information, and connect with Hilton on Facebook, Twitter, LinkedIn, Instagram and YouTube.

About Hilton Honors In order for this site to work properly for you, please make sure your browser cookies are not disabled.

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Hilton Honors is the award-winning guest loyalty program for Hilton’s 17 world-class brands comprising nearly 6,000 properties in 117 countries and territories. Hilton Honors members who book directly through preferred Hilton channels have access to instant benefits, including a flexible payment slider that allows members to choose nearly any combination of Points and money to book a stay, an exclusive member discount, and free standard WiFi. Members also enjoy popular digital tools available exclusively through the industry-leading Hilton Honors mobile app where Hilton Honors members can check-in, choose their room and access their room using Digital Key. Hilton Honors o�ers its more than 100 million members hundreds of ways to earn and redeem Points. Members can redeem their Points for free nights, premium merchandise and items on Amazon Shop with Points; make charitable contributions; or gain access to unique events through Hilton Honors Experiences, such as exclusive artist connections and VIP concerts with Live Nation , and race experiences with McLaren Racing. The program is free to join, and travelers may enroll online by visiting www.hiltonhonors.com. Connect with Hilton Honors at newsroom.hilton.com/hiltonhonors, and follow Hilton Honors on Facebook, Twitter, and Instagram.

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CONTACT

Blake Rouhani Hilton +1 703 883 6615

CONNECT

Hilton Corporate Communications 7930 Jones Branch Drive McLean, Virginia 22102 [email protected]

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