For generations, tips for hotel employees, restaurant workers and everyone else in the hospitality industry were primarily paid out in cash, but today, mobile tipping, also known as “digital tipping” is quickly becoming much more popular.
There are a variety of reasons for this, including evolving consumer behavior, the pandemic and the ability to use mobile devices to complete transactions.
In this post, Canary’s hospitality industry experts examine what all of this means for hotel operators, their staff members and guests, along with the many benefits this new technology brings to each group.
Fewer people today carry paper currency than ever. The decline in cash use is a trend that has slowly gained traction over the past decade as people became more reliant on credit cards, debit cards and eCommerce transactions. Then the COVID 19 pandemic hit, and consumers didn’t even want to use cards anymore as they require physical insertion into a credit card reader that then needs to be touched with fingers or a stylus. Additionally, the use of cards still generally entails coming into close contact with other potentially infectious people. For these reasons, cash-carrying dropped to an all time low and people became much more interested in contactless payments.
Mobile tipping solutions, like the type provided by Canary, use a combination of mobile-friendly web-based tools that can be easily accessed via a smartphone and QR codes strategically placed around a hotel. This essentially turns the action of providing a tip into an eCommerce transaction that can be completed in just a few clicks and requires no new apps or hardware.
Somewhat obviously, the monumental decline in cash-carrying has steadily placed an increased strain on workers that traditionally rely on those tips to supplement their income. Housekeeping staff and other hotel workers were particularly hard hit by these developments, as their tips are not usually included in a larger purchase that may be made with a card or contactless payment solution like ApplePay (e.g., when a diner pays their bill at the end of a meal).
Simply put, less cash in the pockets of hotel guests meant hotel workers could expect fewer tips. These problems were compounded when the pandemic temporarily shut down hotels around the world and made the positions of thousands of people that much more financially precarious.
As the world returned to a new normal and travelers began to frequent lodging properties again, hoteliers everywhere needed to find ways to help employees earn more money.
Mobile Tipping solutions that can be used easily with the aid of a smartphone and QR codes make it much easier for guests to leave tips and staff to get paid digitally, therefore, addressing the problem created by people carrying less cash.
However, it’s not only for the sake of employee happiness that hoteliers need to invest in these types of solutions.
The pandemic caused a historic staffing crisis in the hospitality industry as many workers, faced with financial hardship, looked for employment elsewhere. Attracting and retaining hotel staff members, especially housekeepers, has become one of the most pressing concerns and challenges for hotel owners, operators and management teams.
One way of improving employee attraction and retention would be to increase salaries and hourly wages. However, this isn’t really feasible for many hotels in the current economic environment, which is rife with inflation and concerns of an oncoming recession.
Mobile Tipping solutions have proven to be an effective way for hotels to increase employee compensation by up to $5 per hour without putting an undue strain on a property’s bottom line.
Just because people carry less cash today, doesn’t mean they’re any less inclined to show their appreciation to hospitality workers that provide them with excellent services.
In fact, many modern consumers are highly bothered when they want to leave a tip, but find themselves in a situation in which they cannot.
Providing mobile tipping as an option at a hotel or other lodging property is a great way to improve the guest experience, as it saves people from an awkward moment or feeling in which they cannot show the full measure of their appreciation.
As previously mentioned, mobile tipping helps solve the problem of a cashless society in which many people are still paid in tips. But there are many benefits that simply go beyond providing a substitution for cold hard currency.
Sometimes, it’s not clear to guests whether or not they’re supposed to leave a tip. However, since Mobile Tipping solutions use strategically placed QR codes around a property and in every room, there is never any doubt when a tip is welcome.
Additionally, mobile tipping enables the guest to select exactly how much they want to tip. This means they are not bound to the limitations of cash (i.e., if you only have a $20 bill, you may not want to leave the whole thing). The ability to easily choose an amount to tip means people are more inclined to do so.
Canary’s Mobile Tipping solution has been shown to increase tips for hotel staff by up to 5X.
In addition to the ability to choose how much they wish to tip, guests can also choose whether to leave a tip for a specific individual or an entire department to be shared among them. This makes it much easier for management teams to deal with pooled tips while still allowing employees to collect tips individually.
Any Mobile Tipping solution worth its salt will integrate seamlessly with a property’s existing technology stack. Additionally, it won’t just be offered as an individual point solution. A proper Mobile Tipping solution will be available as a part of a larger Guest Management System and yet still be available as a unique tool that can be separated out from that system. This enables hoteliers to choose exactly how they want mobile tipping to work with their other technologies.
Mobile Tipping solutions make it easier than ever for hotel operators and management teams to collect and distribute. Through a single easy-to-use platform, hotels can create their desired tipping flow, protocols and personalized staff profiles, manage the release of tips on a pre-set schedule and automate all tax forms to ensure compliance.
Mobile Tipping is one of the best solutions hoteliers have to help increase employee attraction, retention and overall happiness. It also is one of the (if not the only) most viable solutions for dealing with the problem of consumers carrying less cash, and yet still living in a society in which many hospitality workers are still reliant on tips as a substantial part of their income. Forward-looking hoteliers should embrace these solutions as a part of the greater need to meet consumer behavior where it is and modernize their hotel technology stacks. Those that do set themselves up for a bright future. Those that do not risk losing yet more employees and shouldering the difficulties of remaining analog in a digital-first world.
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