Hotel Trends: 5 Reasons Why Cashless Tipping is the “Next Big Thing”

BY JUSTIN ROBERTS, CO-CEO, KICKFIN

 

These days, hotels are leveraging technology across almost every aspect of their operations. 

But when it comes to gratuity management, many hospitality teams continue to rely on the same-old analog (and arduous) tip payment processes they’ve used in decades past. 

In an increasingly digital world, sticking with a status-quo, cash-based tipping program is a missed opportunity to increase tip volumes, delight your guests, and weed out operational inefficiencies. That’s why the most innovative, forward-thinking hospitality brands are digitizing their tipping programs from end-to-end — that is, from tip acceptance to tip payout — for both their hotel staff and their food and beverage employees.

If enabling instant, cashless tip payments isn’t already on your radar for 2023: here are 5 reasons why it should be — plus, what to look for when selecting a digital tipping solution.

  1. Cashless tipping increases take-home pay for employees.

Fewer consumers are carrying cash today than ever before. That’s a major problem for guest-facing hotel employees, whose tips frequently make up a significant portion of their take-home pay. Without an alternative way to accept tips, your bellhops, valet drivers and concierges might find themselves empty-handed even after providing excellent service — simply because consumers no longer have cash in their wallets.

Making it possible for guests to send instant, cashless tips right from their phones ensures that your employees are consistently rewarded for a job well done, whether or not your guests are carrying cash. 

What’s more: A robust digital tipping solution will allow you to automatically calculate, pool and distribute tips, giving more of your employees the opportunity to become tip eligible and increase their earning potential.

       2. Guests want a better tipping experience.

Employees aren’t the only ones who get frustrated when they miss out on tips. Most hotel guests have, at one point or another, experienced that moment of panic when they’re face-to-face with a more-than-deserving service provider…but they’re not carrying the right bills (or any bills at all).

Giving guests the ability to send instant, cashless tips directly from their phone is just the kind of intentional, elevated touch that takes hotels to the next level.

Ideally, a digital tipping solution will go “beyond a QR code;” while QR codes are a fast and easy way to launch a digital tipping program, guest adoption can be low. Consider seeking out a digital tipping solution that offers automated, on-brand text “prompts;” at a high level, this technology sends a branded, personalized text message to guests after a service is completed — e.g., housekeeping — and gives guests the option to simply click a link and instantly send a tip from their phone.

       3. You’ll have a single “source of truth” for hotel and F&B employees.

Tracking and reporting tip payments when you’re managing both hotel and F&B employees is complicated at best. Digital tipping software can give you the power to manage all tip payments, for all types of employees — in one unified platform. 

Think of it as your tip payment command center. When you integrate your digital tipping software with your POS, PMS and payroll systems, you get complete visibility into every tip payment — whether it came in through your restaurant POS, or it was a mobile tip sent from your guests to your hotel staff. You can also ensure that every tip is distributed accurately, efficiently, and in compliance with ever-changing tipping regulations.

Plus, you can track every tip payment by individual employee, by shift, by location, or by payroll period, which makes for easy, error-free reporting.

       4. Employees are demanding more control over how they’re paid.

In a competitive labor market, hospitality employers are feeling the pressure to constantly increase wages or offer gimmicks — e.g., hiring bonuses — to recruit workers. 

But for the modern hospitality workforce, it’s not just how much they’re earning that matters — it’s also how they’re getting paid. 

Digital tipping solutions give operators the flexibility to offer multi-channel tip payouts, meaning you can give your employees options as to where and when they will receive their tip earnings.

For example: While many F&B employees might choose to have their tips paid out instantly and directly to their existing bank account, unbanked employees might prefer to receive tips on payroll or even a paycard. A digital tipping solution makes it possible to let your employees choose, without making the process more complicated for you.

       5. Going digital can keep you compliant.

Rules and regulations around tipping are complex, to put it lightly. They often vary from one state or even city to the next, and it seems they’re constantly in flux. An increasing number of hospitality employers have been caught in costly legal battles because they (sometimes unknowingly) violated labor and employment laws related to tipping.

Digitizing the tipping process can help you adhere to those laws consistently across your organization, even if your locations span multiple cities or states. Plus, you’ll have an accurate, detailed history of all tip payments, which can prevent tip disputes and trust issues with your team before they escalate into something more problematic.

Cashless tipping: the final frontier

Hotel operators have long understood the operational benefits of digitizing and automating what they can. Until recently, digital tipping wasn’t on the table — but new technology has changed the game. Now, it isn’t a matter of if, but when, hotels will make the switch.

For operators who are exploring solutions, be sure to seek out a software that is:

  • Truly end-to-end, from tip acceptance to calculation to payout.
  • Highly scalable across your organization.
  • Fully integrated with your existing tech stack for automated user management and tax compliance.
  • Easy to implement.

There’s never been a better time to hit the reset button on your tipping program. The right solution will allow you to create an exceptional tipping experience for your guests and your employees, while delivering measurable results to your business.

To learn more about digital tipping for hotels, contact justin@kickfin.com.

7 Hotel Technology Trends You’ll See This Year

There’s still a long road ahead when it comes to recovery from the COVID-19 pandemic for the hospitality industry—but leaning into tech could ease the transition. The good news? Travel demand is higher than ever, and 50% of hospitality industry leaders predict that hotels will see pre-pandemic levels of revenue in 2023. 

As hotels begin to welcome more guests again, there’s a new wave of technological innovation taking place that’s worth watching. Here are the top seven technology trends we’re looking forward to seeing in hotels in 2023:

1. Automation and Artificial Intelligence (AI)

Automation and AI can now be integrated into nearly every area of hotel operations, from virtual chatbots on booking pages to automated wake-up calls for guests and optimized staffing scheduling based on current hotel occupancy. Three out of 4 hoteliers consider automation to be one of the most important elements of recovery for the hospitality industry, according to ReviewPro.

While it’s unlikely we’ll see robots behind the front desk anytime soon, more and more consumers are opting for automated options like streamlined or contactless check-in, which allows for keyless entry, or using internet-connected wearables that function as keys and charge cards, such as the MagicBands used by Walt Disney World properties.

2. Smart Hotel Rooms

Adding internet-connected devices into hotel rooms isn’t brand new, but it’s now become a must-have for many hotel guests. They expect more control over the heating and cooling system, lights, lock, and window shade systems — ideally in one centralized location or controlled via mobile app — as well as additional safety measures like panic buttons. 

Another amenity on the rise is voice-controlled entertainment like Amazon’s Alexa or Google Home options, which provide personalized recommendations and allow guests to bring their favorite television shows, music, and movies with them when they travel. All of this adds up to a “smart” hotel room designed to help guests relax and feel at home.

3. Harnessing the Power of Data

Guests have been holding off on vacation plans for over two years now—so they expect the experience of a lifetime. Of course, you’re also hoping to create a memorable experience for your guests, but the stakes are much higher than just a bad review. In fact, one survey found that brands dedicated to improving customer experience were ten times more resilient during the pandemic. 

But how can you get to know each of your thousands of guests? To deliver each guest their personalized dream vacation, you’ll need to collect and use personalized data. Now more than ever, guests are comfortable with inputting a great deal of information online through tipping platforms and hotel apps. Thanks to all of this first-party data, hotels can then build guest personas, predict guests’ wants and needs, and create an individualized experience for each guest—no matter how large their customer base is.  

4. Mobile First

97% of Americans own some kind of mobile device, and travelers are now accustomed to accessing amenities and bookings directly from their mobile device. Whether that’s contactless check-in through your mobile app, making restaurant reservations at your resort, or adding on spa packages, you need to increasingly think about how to connect your in-person amenities with mobile access. 

5. A New Kind of Business Center

The way people work has dramatically changed in the last few years, as more companies offer remote-friendly or hybrid office models. 59% of American workers say they now have some flexibility to work from home, according to the Pew Research Center. Increasingly, that’s less tied to their home address and more likely to mean “work from anywhere,” including your hotel. 

That means business and leisure travelers alike bring their laptops with them — and a traditional business center with a few PCs is not going to be an amenity that’s useful. Instead, hotels should consider adding remote work perks, like discounts on multi-week or “workation” stays, staycation packages and rates for workers to get a different perspective in their home city, faster wifi, and more dynamic public spaces designed for remote work.

6. Digital Tipping

While digital tipping has been available for years in other sectors through cash apps like Venmo or PayPal, it’s only just being adopted in the hotel industry. More and more, we’re going to see cashless tipping options available through automated texts, mobile apps, or by placing QR codes in key areas of the property, such as in hotel rooms for housekeeping, at the bar for bartenders, or attached to employee name cards.

With so few Americans carrying cash these days — 3 in 10 Americans say they make no purchases with cash in a given week — digital tipping not only makes it easier for you to track and manage tipping across multiple areas of your property (check-in, housekeeping, pool, restaurant/bar, and so on) but also gives your employees a much-needed boost in earnings. And we all know that happier staff translates to employee retention — and to a happier guest experience.

7. Instant Payments

But what your hotel staff really wants is to have their tips paid out instantly — not for the next payroll, and not on the next business day. According to a recent PYMNTS.com survey, 83% of workers want access to earnings after every shift, and 80% prefer those funds get automatically streamed to their bank accounts.

Kickfin makes it easy to enable cashless tipping for your property, giving you the option to distribute tips to your team in real-time, directly to employees’ existing cards or bank accounts after every shift. See Kickfin in action.

[Video] How Industry Partners are Using Technology to Make Brewery Owners’ Lives Easier w/ CBP

The craft brewing industry is tight-knit, and the community relies on each other for best practices, vendor recommendations, and camaraderie—especially on social media. Thanks to groups like Craft Brew Professionals (CBP), brewery owners can connect to share successes, rant, or ask honest questions about how to better run their businesses.

CBP also opens the dialogue for suppliers, tech companies and other industry leaders to discuss important topics facing breweries. Kickfin co-founder Justin Roberts joined the Craft Brew Professionals Panel to get into all things tech—and why the craft brew industry is still quite analog. The panel included CBP Host Andrew Copolon, PK Agriwal of Beer30, Dan Hornbrook of BrewLogix, Ian Purcell of BarTrack, and Ian McHarg of Country Malt Group. 

Brewery visitors are seeking new experiences and digital capabilities. 

Much like other service-oriented businesses, brewery owners are noticing that customers want a lot more out of their visit than an extra-hoppy IPA. Dan’s work with BrewLogix gives him lots of insight into brewery customers’ expectations.

According to Dan, “People are looking for more than just products; they’re looking for experiences.” He went on to explain how his website, BreweryDB, helps beer consumers find the right brewery for every occasion. “If you’re searching for a date night with live music or you want to make sure they have a kid-friendly menu, you can look that up and use filters to take a dive deep into the breweries before visiting.”

Part of the brewery experience is also talking to knowledgeable bartenders. Believe it or not, tech can improve your bartenders’ performance and average check size. Justin noted, “One unique evolution that we’ve seen around digital tipping is that it’s finally putting valuable data in the hands of the operator to then empower staff. They’re all there to make money and have fun, but why not show those employees the true reward of giving great service through tip transparency?” 

Andrew added, “One of my favorite metrics is tip percentage because if Dan’s behind the bar and he’s consistently getting tipped 16% but Justin’s getting 26%, Justin’s obviously engaging at a higher level.”

“Customers are looking for a higher pace of knowledge at a brewery compared to a craft beer bar, so how can breweries leverage that?” asked Andrew. “It’s about educating staff on the product so they can talk about it more effectively. In the end, hopefully they’re getting more tips and ringing in more beers. Technology really can give staff a bigger arsenal to get more tips and add more money to their pockets.”

Customers are mainly paying with cards or digitally these days and will soon expect digital capabilities with nearly every service experience, including at breweries. CBP’s Andrew Copolan asked Justin if he expects cash to be phased out in the near future.

“There will always be people that literally want to remain unbanked and pay in cash,” said Justin. “However, more people are on Zelle than ever before, and most younger people are paying digitally. People aren’t even writing checks to pay their bills anymore. As we inch toward over 98% of transactions being cashless in the next five years, I would assume that basically everything would be digital.“

Breweries are behind the learning curve. 

Beer is one of the oldest industries in the world. For centuries, brewers have been refining their crafts and inventing new processes and types of beer. In such an old-world industry, it may not be surprising that technological innovation is lacking. 

“I noticed when I went to breweries that used popular software systems, they would still have a binder full of paper logs, whiteboards, and spreadsheets,” said PK. “I quickly realized that there wasn’t an industry standard when it came to brewery data tracking.”

Dan agreed, “People are still shaking kegs to find out what’s inside of them, which is pretty wild that that’s still the standard practice to know how much beer is left in a keg. We have a great product that helps solve that and saw the opportunity to get some real-time data to people’s hands.”

To drive home the point, Ian from CMG added, “People put bulk malt into silos, and to check the levels, they knock on the silo with a rock or a stick. We thought, why not put automatic sensors in there to tell us when it’s time to place a new order. Or, what if we created an app where customers get prompted to order the same product they ordered last year. Again, we just want to make people’s lives easier.”

Customer feedback is a goldmine.

The panelists all shared their appreciation for customer feedback and how it shapes their business decisions. PK said, “I always tell our clients not to worry about hurting my feelings, I need to know what they hate the most about what we’re doing because that feedback is actually gold to us. It allows us to grow as a company and identify where we can improve ourselves.”

Feedback also empowers them to take a closer look at which services and features really wow their customers so they can improve even further. Dan explained, “It’s really cool to have those moments of realignment and choose to put more time and effort into building out a feature that customers really want. As leaders of our organizations, we have to be humble enough to do things not because we think it’s right but because it’s what the customer wants. It’s not easy, but ultimately, that will guide you in the right direction.”

Of course, tech-minded companies are using social media to get real, honest feedback from their consumers, which they can turn into improved products and features. “Thanks to groups like CBP, everybody can be very vocal about what’s causing them headaches,” said Ian (CMG). “Social media, for all of its challenges, has offered a platform where we can hear what the most people need and why, and that allows folks like us to try and meet those needs. It’s fantastic just to follow the pulse of the industry based on people’s comments, questions, and sometimes even rants in CBP because you learn so much.”

Measuring success.

What does success look like for brewery-tech companies? For most of the panelists, success is becoming a real partner with their customers and providing valuable data. As Andrew put it, “You’re there to be an engaged partner, holding their hand through it. You don’t want to just dump a bunch of data on them; you want to teach them to use that data and really help implement data-informed decision making.”

Dan also hoped for data to drive growth, adding, “Our goal is to deliver data in a way that helps make a business decision that will help them grow. We want it to be data customers can trust, and data that they can use to better prepare staff. Really, we want to empower them to grow their business, so if we see our partners growing, then we’re doing our job right.” 

For Justin, success comes in many forms. Not only does he aim to quickly convince operators of Kickfin’s value, he also hopes to better the lives of the tipped employees. “We are always focused on a 24-hour ROI,” he said. “If we can’t show that digitizing the cash tip-out process is going to save you time, money, and a whole bunch of accounting nightmares within 24 hours, then we’ve lost our seat at the table … Kickfin offers employees a way to live more financially-sound lives by sending that digital money to their bank of choice as soon as their shifts end.”

We were honored to connect with other service-industry leaders who want to help breweries harness the power of tech and data to ultimately strengthen their businesses. To watch the full conversation, click here.

8 Restaurant Software Solutions You Need for 2020

For restaurant operators — and the consultants who advise them — building out your technology stack can be overwhelming. There are literally hundreds of software products and platforms at our disposal that promise immediate ROI, new operational efficiencies, increased productivity…the list goes on.

Of course, no restaurant needs more than a handful of tech tools, no matter how big you are. So how are you supposed to know which ones are right for your business?

We recommend taking a step back and thinking about the solutions you require — before you start sifting through actual vendors and platforms.

Below, we’ve compiled a list of solutions we’d recommend for every multi-location restaurant group. It may look like a lot — but the good news is that with only a few different tools, you can cover every item on this list!

1. POS Software

At the most basic level, your POS hardware and software should give you the tools you need to manage orders and process payments. A modern POS system should also have data security features to protect customers’ information (and yours), and it should also provide some level of reporting. 

With that being said, there’s now a good amount of crossover between POS solutions and end-to-end restaurant management software. The latter includes POS hardware and software, as well as some combination of inventory management, employee management, accounting, payroll, and more — but not everyone needs such a robust solution. 

Let your budget be your guide, and also consider the tools you’re currently using so you don’t double up on functionality.

2. Accounting Solutions 

Many restaurateurs outsource accounting to third-party firms or consultants, and that can be a great solution. But if you’re handling everything in-house, you need a transparent, accurate, and easy way to track your numbers — including sales, revenue, food costs, vendor payments, payroll, and more.

You’ll want an accounting system that integrates seamlessly with your POS solution, as well as any other software solutions you have in place. You also should be getting automated, actionable and real-time insights into where your business stands financially. Bonus points if it automatically tracks payments and generates 1099s for your vendors.

3. Payroll and Tip Out Solutions

For many restaurant owners, operators and managers, payroll swallows up hours of their week, every week. Choosing the right payment solutions will not only give you time back; it will also make a strong statement to your employees — that you care about them getting paid fairly, quickly and predictably.

Many employees in the restaurant industry live paycheck to paycheck, which means the faster they can access the wages they’ve earned, the better. If weekly payroll is cost- or time-prohibitive for you, then leveraging a real-time tip-out solution for your employees can fill in those gaps between paychecks.

Keep in mind: With both payroll and tip-out software solutions, there may be hidden fees (for you and for your employees) that you’re not accounting for in your monthly or annual vendor payments. Make sure you fully vet the solution you’re considering before you sign on the dotted line.

4. Workforce Management Solutions

Hospitality employees often struggle with difficult or unfair schedules, lack of training, and poor communication. Leveraging workforce management software solutions can boost your team’s culture and drive retention, loyalty and engagement. Plus, it can reduce labor costs from 4 to 5%.

If you’re purchasing workforce management software for a multi-location restaurant group, it should offer (most of) the following capabilities:

  • Auto-scheduling
  • Time tracking
  • Workforce communication
  • Insights and analytics
  • Hiring, training and other HR functionalities

5. Table/Floor Management

Table management solutions deliver visibility into what’s happening at each table in real-time, so your team can know exactly when and where to seat guests, serve guests, bus tables, etc. 

Table management solutions also give restaurant operators actionable data and insights around what’s happening on the floor. And by reducing wait times and making service more efficient, they often result in a more pleasant experience for guests.

These tools run the gamut from super simple to incredibly smart. But don’t pay for more than you’ll need in the foreseeable future, and consider all the implications of going digital: for example, if your demographic skews more Baby Boomer and less millennial or Gen Z, some of those (very cool) features may not be necessary.

6. Inventory Management and Purchasing

When you automate inventory management and purchasing, you’ll cut down on food waste and costs, keep inventory records current, understand how food costs stack up against revenue, and make bookkeeping a breeze. 

Pro tip: Be sure your purchasing and accounting solutions to play well together, if they’re not part of the same platform, so you can avoid the dreaded export/download/import process.

7. Online Ordering and Delivery

Smart restaurateurs know that online ordering capabilities can quickly and easily increase sales, especially during slower seasons. 

Choosing the right online ordering platform can also save you time, labor costs and hassle. It’s faster than phone orders (and requires less manpower), and orders go straight to the kitchen, so there’s a lower risk of human error. 

Plus, once your online ordering program gets off the ground, you’ll have a wealth of customer information that you can leverage to market to them, so they’ll keep coming back to you.

Remember: if online ordering isn’t part of the POS solution you’ve purchased (or you’re about to purchase), you’ll want to be sure they sync. The same goes for menu management, so you can avoid having to update menus in multiple locations every time a menu item or price changes.

8. Customer Loyalty Solutions 

A loyalty program is a highly effective marketing tactic for restaurants, and (bonus!) it can be relatively hands-off, once it’s up and running, assuming you’ve got the right software in place. 

There are so many ways to structure loyalty programs: points systems, tiered programs, etc. Maybe you want to build a VIP program, or perhaps you want to reward guests for making referrals or writing reviews. If you’ve got a vision for the way you want yours to work, there’s likely a software solution that can make it happen.