What’s Driving Hotel Technology Trends? Key Insights from HT-Next

Kickfin recently sponsored and attended HT-Next, a premiere hotel technology conference. Over four days in Miami, Kickfin co-founders Justin Roberts and Brian Hassan met with hospitality industry leaders, tech innovators, and top hotel operators to learn about key goals and concerns for 2023. Here are some of the key takeaways from the event.

Renewed Focus on Sustainability 

Grant Romundt, co-founder of Ocean Builders, spoke to an industry trend that’s been building for a while (and isn’t slowing down): sustainability. Now more than ever, guests want to patronize businesses that share their core values and beliefs. Specifically, they’re choosing hotels based on how much those brands are doing to protect the environment, especially in beautiful, tropical locations.

Ocean Builders is aiming to do just that by building high-tech eco-restorative floating homes that provide guests with a one-of-a-kind experience while also preserving the ecosystem to serve guests for generations to come. 

Expanding the Guest Experience

The hospitality experience you create isn’t limited to the four walls of your hotel. Instead, it extends to every aspect of your guest’s stay, including the activities they do while they’re away from the hotel. With that in mind, HT-Next partnered with Mobi to explore the possibilities of hyper-personalized guest experiences built by AI.

AI now offers you the opportunity to build the perfect trip for each individual guest. Using guest data and your knowledge of the area around your hotel, you can build AIs that will plan a personalized suggested itinerary for your guests, taking hospitality to the next level. 

Bouncing Back from Covid 

Most of us might feel like things are “back to normal,” but some hotels are still feeling the strain of the Covid-19 pandemic. And they’re turning to tech to bring them back to life. 

A panel of Miami hotel general managers shared how they stayed afloat during the height of the pandemic, how the travel and hospitality industries are bouncing back, and how tech has quickly become a huge part of their daily operations. 

Solving Labor Shortage Concerns

Labor continues to be a point of contention in hospitality. Questions about how to attract new hires and how to retain the employees you have continue to vex hoteliers in this tight labor market. The answer isn’t as simple as raising wages (although that doesn’t hurt). Instead, industry leaders are looking to technology to help create better work environments and more streamlined processes to get things done, even at sub-optimal staffing levels. 

At Kickfin, our goal is to provide hotel staff with more opportunities to earn tips through digital tipping software — allowing for guests to tip more often in an increasingly cashless society. We also simplify the tip payment process so employees have access to their earnings faster (a major selling point for potential hires). 

Our main takeaway: Hotel technology isn’t going anywhere. Expect to see more automated hotel operations, better uses of guest data, and sky-high guest experience expectations.

How to Calculate the Tip Credit

Tipping could be considered the ultimate win-win for restaurant teams. Not only do tips significantly increase the earning potential of restaurant employees; in states that allow the tip credit, tips can also help offset labor costs for employers. 

While the tip credit can be a boon to a restaurant’s bottom line, calculating the tip credit can make payroll a little trickier. 

While most business owners can simply multiply their staff’s hourly wage by their hours worked, restaurant owners who want to take advantage of the tip credit will need to take a few extra steps to determine how much they need to pay their employees on payday.

The downside? A little bit of math. But don’t worry — we can help you out with that part. Here’s what you need to know in order to calculate the tip credit. 

First things first: Does the tip credit exist in your state?

Before you start running the numbers, you need to make sure the tip credit is legal where you operate. Tipping regulations vary pretty widely state by state — and the tip credit is no exception. 

In a few states, you must pay the full minimum wage, even for tipped employees. At the time of publication, those states are:

  • Alaska
  • California
  • Minnesota
  • Montana 
  • Nevada
  • Oregon 
  • Washington

(If you operate restaurants in one of these states, we’ve got another post on tip calculations that might be helpful to you) 

If your state isn’t listed above, then the tip credit is probably allowed in your state. Read on to ensure you’re calculating the tip credit accurately and legally. (And please keep in mind — this post isn’t intended to be legal guidance. Always contact a lawyer with specific questions to ensure your restaurant is compliant with state and federal tipping regulations.)

How does the tip credit work?

With the federal minimum wage still set at $7.25 an hour, employees are required to make at least that much while working at your restaurant — but that’s not how much you have to pay them. Based on the federal tipped minimum wage requirements, you could take a tip credit of up to $5.12 an hour.

How do you calculate the tip credit?

(Keep in mind: these steps are based on federal laws. Your state may have additional or different regulations that apply to your restaurant — so again, consult a lawyer if you have questions.)

1. Keep meticulous records

One of the key tenets of taking the tip credit: making sure employees earn at least minimum wage on an hourly basis. But in order to do that calculation, you’re going to need detailed records that include hours worked, tips earned, and any tips shared with other employees. This will all come in handy when it’s time to process payroll. 

2. Grab your calculator 

When payroll time arrives, it’s time to revisit some of those multiplication tables that you thought you left in grade school. 

As an example, let’s calculate payroll for a part-time server who worked 40 hours during the two week pay period, and earned $250 in tips.

  • How much she must earn by federal minimum wage standards: 40 hours x $7.25 = $290
  • How much can you take in tip credit: 40 hours x $5.12 = $204.8
  • How much she earned in cash wages: 40 hours x $2.13 = $85.2

Now, we’ll use all of these calculations to see if she earned enough to meet minimum wage:

$250 tips + $85.20 hourly = $335.20 total

Since this server earned well over the minimum wage, you can claim the full tip credit of $204.80. 

But what if she had come up short? 

If the same server worked the same hours but only earned $200 in tips, she would have earned $285.20 — a little short of minimum wage. You’ll need to make up the $4.80 difference in that situation. 

How do you calculate the tip credit when paying overtime?

While most restaurants try to avoid paying overtime, short-staffed restaurants may not have an option. If you do pay overtime, here’s how it works when also calculating the tip credit. For example, let’s say that a server worked 50 hours and earned $300 in tips. 

  • $7.25 minimum wage x 1.5 = $10.88
  • Maximum tip credit remains $5.12/hour 
  • Overtime hourly tipped wage = $5.76

Now, let’s do some math: 

  • How much must she earn in overtime minimum wage: 10 hours x $10.88 = $108.80
  • Add her regular hourly minimum to the overtime minimum: $108.80 + $290 = $398.80
  • Tip credit minimum wage: 10 hours x $5.76 = $57.76
  • Maximum tip credit: 50 hours x $5.12 = $256

Finally, you can add tips, regular tipped minimum wage, and overtime tipped minimum wage to see if she earned at least $398.80: 

$300 in tips + $85.20 regular hourly wage + $57.76 overtime minimum wage = $442.96

Even with overtime, this server still made enough for you to claim the maximum tip credit of $256. Again, if she hadn’t, you would have to make up the difference. 

Additional tip credit resources

Simplify employee payments with Kickfin!

Kickfin makes it easy to pay out your tipped employees — no calculator (or cash) required. Request a demo today and see our cashless tipping software in action!