RICHARD RIDER NOTE: There’s been much discussion about how automation — combined with the $15 minimum wage — will price much of the country’s unskilled and low-skilled labor out of their jobs. But automation is just one of many labor-replacing alternatives that businesses doubtless will implement when the pricing justifies it. Consider this latest wrinkle — presented in an article written by my son Steve:
Marriott’s “Help Us Conserve Water” Program Seem More Likely a Reaction to Minimum Wage Increases
by Steve Rider
As a corporate consultant, I travel on business quite frequently. It’s a rare moment when I go through a perfunctory hotel check-in and get asked a question I’ve never heard before.
Yet this week while checking in at a Marriott that I’ve stayed at several times, this is exactly what happened. “Would you like to take advantage of our opt-out housekeeping program?”
I asked what it was, and the desk clerk explained to me that now Marriott is offering the option for guests to opt out of housekeeping and to then receive 250 Marriott points per day.
Giving points is a more effective incentive than giving a lower hotel rate. Most business travelers bill their hotel costs to their employer, or to the customer. But by giving points rather than a discount, it benefits the person making the hotel reservations — the guest — rather than the bill payer.
I did a little research and found that the program has been around a little more than year, but it’s now being rolled out to all hotels. Front desk staff is being more vocal on informing guests of the policy. Looking at a receipt advertising the program, Marriott’s purported motivation for this is to “Help Us Conserve! Together we can save millions of gallons from chlorine and detergents!”
However, this seems a little dubious when one considers the following points:
Why are they pushing this option now? The “going green” concept has been around for decades. Marriott rewards points have been around for over over 30 years. Why the sudden aggressive push to bribe customers with points now?
Marriott’s had a policy to reduce towel waste for years. Like most hotels, Marriott encourages guests to leave towels which don’t need washing hung up on a rack, while towels left on the floor will be washed and replaced.
Looking closely at the fine print of the offer, one notices a peculiar requirement to receive the 250 points. Guests have to decline housekeeping by 2AM of the day. This makes no sense from a “save water” perspective. The much more logical conclusion is that Marriott wants to know what percentage of their occupied rooms will need to be cleaned so that it can reduce its housekeeping workforce the following day.
It’s an innovative attempt to control housekeeping costs, and it’s not the first time Marriott has recently tried to address housekeeping costs without directly raising prices. Now with California leading the way with massive increases in the minimum wage, it seems likely that Marriott’s real motivation for this program is a low profile but highly effective way to combat spikes in labor costs.
Hotel cleaning staff is one of the more vulnerable fields to minimum wage laws, giving employers few options beyond raising prices or reducing services. Most housekeeping work cannot be automated or outsourced. Additionally, skillsets among cleaning staff is not going to vary in large degrees. A fast food restaurant may be able consolidate some of its headcount with highly skilled employees who can manage the register, speak 3 languages and still flip burgers, but it’s difficult to imagine a housekeeper being twice as valuable as their co-workers.
What should really surprise no one is that liberals’ aggressive minimum wage laws will hurt the very people it’s intended to help. Ironically and most certainly not by liberals’ design, it’s actually going to benefit white collar business travelers like myself. Seeing this, one can understand Marriott’s decision to promote this as a “Save Water!” program instead of a potentially less popular title of, “Help us reduce our low-income workforce and earn free travel!”
Regardless of the intent of Marriott’s plan, the program will most certainly allow Marriott to control its labor costs more effectively. As more housekeeping staff gets laid off, or their hours slashed, the media will paint Marriott as a greedy corporation laying off its loyal workforce (Marriott’s after-tax profit on all sales was 6% in 2015).
I suspect that this innovation will be adopted by other hotel chains. Indeed, Marriott itself might have adopted the idea from a competitor. Good ideas have a tendency to be widely adopted. And that’s not good news for unskilled hotel staff — or for low-skilled employees in every industry.
The beauty of this Marriott plan is that those who feel guilty about reducing employee workload and paychecks can opt for a daily room cleaning — and forego the reward points. Or leave a bigger tip for the person who doesn’t clean the room (don’t bother me with details). To each his own.