Toward travel’s frictionless frontline: Integrating technology and workforce
Technology is dramatically accelerating the worlds of aviation and hospitality—will your frontline workforce be ready?
Eileen Crowley
Michael Daher
Danielle Hawkins
Matt Soderberg
Peter Caputo
Maggie Rauch
Travel, along with service industries more broadly, has recently faced unprecedented workforce challenges. The onset of lockdowns in 2020 sent workers home from their jobs in hotels, airports, and planes almost overnight. Many months later, as occupancy rates and flown passenger volume rebounded from pandemic lows, staffing lagged these demand metrics. Workers from the front lines of travel had seemingly landed elsewhere.
COVID-19 may have ushered in acute staffing woes, but longer-term forces contributed as well. And alongside these workforce dynamics, another long-term industry shift has continued: greater automation and general tech integration across the travel experience and the processes and humans that support it. Much of this technology augments or alters human labor, such as digital room keys and data analytics for flight crew planning. Tech adoption is changing workforce management—from required skillsets and training and onboarding to career pathing and development.
As travel leaders navigate technology’s workforce implications, challenges abound, including employee readiness, traveler receptiveness, fragmented organizational structures, and orchestration across tech applications. Many leaders across aviation and hospitality are facing significant disruption in how they invest in technology and people. Deftly navigating the opportunities and stumbling blocks created by this new alchemy between technology and workforce could lay the foundation for a great work environment, a great customer experience, and overall success.
Methodology
This report draws on a survey of 240 travel executives, fielded from July 12 to August 7, 2023. The study reached 120 hotel general managers and owners, and 120 airport managers across the United States. Interviews with executives from leading hotel brands and airlines further guided the study.
Key findings
- Facing constraints in staffing up frontline roles, travel providers are using technology to ameliorate the problem in the short term. Half of hotels surveyed, and 99% of airport managers, say they are adopting new technology to bridge the labor gap.
- While leading tech adopters expect automation to decrease labor costs, few anticipate a drastic or imminent reduction in headcount. Only about a third of leading tech adopters expect technology to reduce the size of staff at their organizations over the next five years.
- Tech has major impacts on the frontline workforce. It is changing required skills, such that nearly half of all respondents cite reskilling workers for new technology as one of their top three workforce concerns. In service of this aim, most are increasing their use of virtual reality tools for training scenarios.
- Implementation of technology also affects the travel experience. Three quarters (74%) of airport respondents and 57% of hotel general managers (GMs) say they expect automation to boost the guest experience, and in turn, their bottom lines.
- As they seek the right mix of investment in technology and people, hotel GMs and airport managers are keen for more tailored tech solutions and greater support from leadership. When asked about barriers to success, many survey respondents noted technology that is more tailored (94% of airport managers) or advanced (43% of hotel GMs). About half of respondents across both groups pointed at lack of leadership buy-in as a barrier.
Talent on the return, but perfect matches prove elusive
Travel has rebounded significantly from its pandemic lows,1 but both hospitality and aviation are still understaffed compared to 2019 levels. More than half of hotel respondents (53%) say that their properties have between 25–74% of the workforce they had in 2019. Airports are operating even leaner—62% say their workforce is half its prepandemic size or smaller (figure 1).
Hotels and airports are confident that staffing levels will continue to climb, but fewer than one in 10 expect to reach 2019 staffing levels by the end of 2023, and only a minority of them expect to get there any time in 2024. Even looking beyond 2030, a significant share of each group expects to remain below prepandemic staffing levels. Travel executives either expect a prolonged crisis, or they anticipate that they will need fewer workers in the future.
Airlines interviewed are feeling the labor crunch as well. Shortages of pilots, mechanics, and air traffic controllers are widely reported. But some airlines also face challenges around flight attendants, baggage handlers, and call center workers.
It is not a simple matter of finding available workers willing to do the job. Matching needs to skills and maintaining capable teams has become more challenging. One airline executive noted: “We used to get very experienced entry level employees and now we are getting more applicants right out of school with limited experience.” Hotels have similar concerns (see, Recruitment, retention, and alternative workforces). Mismatches between their needs and the skills of available workers is their top workforce challenge, followed by the cost of recruitment and onboarding (figure 2).
Some travel suppliers are already using technology to streamline hiring, using AI to identify suitable candidates and chatbots to provide a layer of mutual vetting between the prospect and the employer.
Solving recruiting, onboarding, and training puzzles to keep frontline roles fully and optimally staffed can have bottom-line impacts. In extreme cases, understaffed hotels sometimes take rooms offline, and airlines can be forced to cancel flights. When storms throw airline networks into disarray, inadequate staffing can make it even harder to navigate those meltdowns satisfactorily for travelers. Understaffing also contributes to more chronic consequences. Most survey respondents say that labor challenges have affected the product: eighty-four percent of airport respondents and 70% of hotel respondents have reduced or eliminated amenities and services in response to staffing shortfalls (figure 3).
Recruitment, retention, and alternative workforces
Airports and hotels are exploring strategies to plug the human capital gap beyond efforts to retain talent. Many are hiring from previously untapped labor sources by partnering with industry and educational institutions to help shape the future workforce from the get-go. Most chain properties are seeking more support from their headquarters, preferably in the form of investment in relationships with schools and institutes (61%), followed by support for better pay and benefits (56%), and incentives (55%), as well as more centralized training (55%).
They also are turning to third parties to help with difficult-to-fill roles. Airports surveyed expect alternative sources to more than double as a share of their payroll, going from 17% in 2023 to 38% in 2030. Hotels expect an increase from 28% to 37%. Baggage handlers and housekeeping are the roles most expected to be filled by gig, contract, and temp workers. This staffing option addresses needs, but it is not without its challenges. A shortage of homegrown experts is felt by many hotels and airports. Some leaders are also struggling with the competition with other industries for alternative workers and the constant need to train them.
Tech transforming the experience—for workers as well as travelers
In a difficult staffing environment, travel leaders are pulling several levers to bridge the labor gap. Beyond recruitment and retention strategies, some are also investing in technology, which will change the experience for both those who work in these spaces and those who pass through as travelers. Think of a gate agent who now has time to help a traveler rebook a two-layover itinerary because other travelers on a cancelled flight can rebook easily on the airline’s app, or a hotel restaurant manager who knows the likely meal preferences of a frequent guest of her chain.
While technology shows great promise in travel settings, preparing teams to make the most of it is a major bottleneck right now. Retraining workers and redesigning work for new technology are big concerns of both hospitality and aviation (figure 2). Encouragingly, though, this pain seems to go away with time. Concern about reskilling for technology and redesigning work for new technology is only about half as prominent among the hotels that are leading tech adopters.2
Nearly all airports say they are addressing labor challenges by adopting new technology, upgrading existing technology, or automating repetitive tasks (figure 3). Opportunities to augment human labor with technology are growing and will have major implications for how work is executed—which in turn could change the skills needed, spurring new approaches to hiring and training.
Digital DIY vs. the human touch: What do travelers want?
Leaders expect technology to have a major positive impact on the guest experience—74% of airport respondents and 57% of hotel respondents say they expect technology to boost the bottom line due to an improved traveler experience.
For the most part, travelers agree. Over four years, traveler preference has shifted to welcome digital intervention across most touchpoints in the journey. Deloitte surveyed travelers in 2019 and 2023 regarding their preference for human interaction vs. digital fulfillment for several travel-related processes, including: check-in, modifying reservations, ordering room service, changing a flight, retrieving misplaced luggage, and more. In 2019, few respondents expressed preference for digital channels. By 2023, traveler preferences shifted for most touchpoints, with a big share of travelers of all ages becoming more comfortable with blended human/digital touchpoints.
In this shift toward preference for digital, there were two notable exceptions: for both check-in and for fixing an issue with a flight or a stay, travelers’ preferences moved more toward human support vs. fully digital fulfillment. It seems that there may still be too much friction in these processes, or that travelers’ anxiety is high enough in these moments that they prefer human support. At the same time, these are exactly the processes where traveler suppliers are placing the biggest bets on digital: ninety-eight percent of airports say they are moving toward predominantly digital check-in, and 71% of hotels say they are moving to mostly or completely digital check-in (figure 4).
Given it seems unlikely that hotels or airlines will reverse course on digital check-in, they should reconsider their tools and execution. Solutions should address both the technology and the workforce. Can guest applications be more intuitive, or do more to address common anxieties that arise during the process? Can frontline workers be better trained to identify travelers in need of assistance and empowered by technology to offer aid?
Concern about technology displacing large numbers of workers seems to have grown in recent years as artificial intelligence (AI) and other technologies have matured. However, workforce reduction is low on travel leaders’ list of anticipated impacts of automation. More than half of the leading tech adopters3 among airport and hotel leaders expect automation to decrease labor costs, but few anticipate a drastic or imminent reduction in headcount. Only about a third (36% of hotels and 31% of airports) expect technology to reduce the size of staff at their organizations over the next five years. Airline leaders interviewed cited change management and the need to build trust in new technology as factors slowing potential workforce reduction.
Few aviation or hospitality leaders expect a drastic or imminent reduction in headcount. Only about a third expect technology to reduce the size of staff at their organizations over the next five years.
Rethink, retrain, and reap the benefits
Tech has great potential to improve hospitality and aviation operations, and to empower those on the frontline to deliver excellent service, but also requires new approaches to workforce deployment. Over the short term, at least, some of the biggest challenges lie in reskilling workers, and the biggest opportunities in improving the work experience. Unions also see the opportunity in retraining. According to a perspective published by the Society for Human Resource Management, “The most common bargaining demand is for robust retraining of union members to improve their suitability for new jobs that emerge from the introduction of technology.”4
This reskilling is a leading challenge in both hospitality and aviation. About half of airport managers and four in 10 hotel general managers placed it among their top three workforce challenges (figure 2). A related issue, redesigning work for new technology, was the top-ranked workforce challenge for airport respondents—more than two in three (71%) placed it in their top three.
As new technology changes workforce requirements, travel leaders expect many interpersonal, managerial, and technology-related skills to grow in importance, but two in particular rise to the top across both hotel and aviation: digital skills and creativity. In a tech-enabled hotel environment, this could look like a concierge employing an AI tool to surprise a guest with a tailored activity recommendation. In an airport, a gate agent could be alerted by a chatbot system to a frustrated flyer in the terminal and step in to help find solutions.
Travel leaders that can effectively navigate these workforce challenges alongside automation appear poised to benefit across their businesses. Most respondents expect automation to create new opportunities for workers, improve the work environment, and boost the bottom line by improving the guest experience (figure 5). Technology is also being applied to improve recruitment and training. Ninety-four percent of airports and 62% of hotels say they are increasing their use of virtual reality in training. Nine in 10 respondents from both sectors say they deliver some training via mobile phone.
Invest, test, and learn: The evolving state of tech adoption
As they continue to invest, test, and learn, leaders in hospitality and aviation are identifying the right tech for jobs to be done across their business. AI and cloud computing seem to inspire the highest expectations at the moment (figure 6). Airport leaders expect AI to significantly improve task performance across their operations within five years, and expectations for cloud computing are also high. Hotel leaders (a group that is earlier in its tech adoption journey vs. airport leaders) also rate AI and cloud as most impactful. For leaders in both sectors, internet of things (IoT), blockchain, robotics and generative AI have high potential for specific tasks.
Airport executives’ perspective on AI and cloud computing comes from experience: Nearly all airport respondents have implemented applications from both. Still, their rate of tech adoption might be higher if offerings were more tailored to their unique needs. The biggest barrier to tech adoption at airports is a lack of customization, followed by regulatory requirements (see, Barriers to tech adoption). Tech providers may be bringing solutions to airports without accounting for the unique needs of the environment. Airports operate under specific security requirements, and compared to a shopping mall or event venue, place a high priority on moving visitors quickly through a series of checkpoints.
Barriers to tech adoption
Airports and hotels both face obstacles to tech investment and see shortcomings in current offerings, and each group’s biggest barriers to adoption reflect their distinct organizational structures. Airports, which are more independently empowered to make investments, lead hotels in tech adoption: seventy percent of surveyed airports have invested in at least three new technology types,5 vs. 57% of hotels. Still, airports seek more tailored technology and indicated that regulatory requirements hold them back (figure 7).
Most hotel GMs answer to brands and management companies, both of which often make operational decisions across many properties and prioritize consistency. Not surprisingly, leadership buy-in and brand-level approval are among the top tech adoption barriers cited by GMs. But if hotels’ investments lag, it cannot all be blamed on the brands. Chain properties are more mature adopters—66% employ at least three new tech types, and 27% employ four or more, vs. 42% and 6% for independents. Overall, however, GMs’ responses indicate they would like to see more strategic commitment to innovation at all layers of leadership.
The complexity of both the hotel and airport environments also complicates tech adoption. Tangled in multiple solutions, 45% of hotels say that the fragmented nature of technology and data prevents them from achieving a singular, end-to-end view of their customers and operations. Nearly a third of airport respondents agree. Integration with their current tech stack also concerns a third of the hotels and airports.
Leaders in both aviation and hospitality seek tech solutions better suited to their needs. Solution providers should respond by offering more tailored products, and work toward both better understanding at the property level and better buy-in at the corporate level.
Enabling tech for a flourishing frontline
Despite the barriers and challenges, the travel industry clearly has an appetite for automation. Travel organizations have many reasons to invest in new technology—smoothing operations, increasing efficiency, reducing friction for the traveler, and expanding revenue opportunities. Regardless of the intended outcomes, though, this investment has profound implications for travel’s frontline workforce. To help their teams navigate rapid change, and reap the benefits of tech adoption for workforce improvement, industry leaders should consider adopting the following practices:
- Equip frontline workers with technology to better serve guests. As new technology emerges, consider additional tools you can put into the hands of your frontline workforce to drive more efficient processes and improved guest interactions.
- Hire for the right skills. As frontline processes become more tech-enabled, consider how the skills your frontline workforce needs to be successful are evolving.
- Provide additional learning opportunities. Leverage the increasingly tech-enabled nature of travel organizations to provide workers with opportunities to develop capabilities and acquire new skills, two key elements to attracting and retaining frontline workers.
- Monitor how technology changes the demands of frontline roles. Consult with workers and adjust accordingly to foster the best possible environment for guests as well as your workforce.
Moving forward, travel leaders should always consider the impact that technology investment has on their frontline workers. Careful and strategic investment in developing workforces to make the most of these technologies can help leaders avoid pitfalls and missed opportunities, as well as unlock unexpected benefits.