Mobile tipping comes to hotels: Will housekeepers really benefit?


No cash on hand to tip a housekeeper on your next hotel stay? No problem.

A major hotel company launched a mobile tipping platform this month to keep things cashless, and there are signs more may be in the works.

However, there is some doubt in the industry as to how much housekeepers will make with the more tech-savvy offering compared to just leaving a few bucks on the desk when you leave the room.

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Wyndham’s new mobile tipping offer for participating hotels in the US and Canada means guests can scan a QR code to tip a team member. Developed by cashless tipping platform Bené, the service accepts multiple forms of payment including credit cards, Apple Pay and Google Pay.

It’s also a huge visual win for Wyndham, as it becomes one of the first major hotel companies to offer something like this.

The launch of an initiative encouraging guests to tip housekeeping might raise some eyebrows, as Marriott and Maria Shriver recently faced backlash over their campaign encouraging hotel guests to tip their housekeeping staff give. (People wondered why the billionaire hotel conglomerate didn’t pay its workers a living wage up front.)

Wyndham’s new mobile tipping platform grew as a result of reaching out to hotel owners and housekeepers during the pandemic about ways to improve the work experience.

“Because some of the housekeepers left during the pandemic and took non-hospitality jobs, we formed a group with those housekeepers where we literally set out 82 different things we could do for them on the property,” Scott said Strickland, Wyndham’s chief information officer, said in an interview with TPG. “This was one of the top priorities.”

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The mobile tipping feature is currently only available at just over 20 hotels, but Strickland told TPG Wyndham that several hundred hotels expect to roll out the feature by the end of the year.

The service makes sense in a way. According to consulting firm McKinsey & Company, 82% of Americans will use digital payments by 2021 — including in-store checkouts on smartphones and payments via QR codes, as well as browser-based and in-app purchases. That’s an increase from 78% in 2020 and 72% in 2016.

“I commend Wyndham for that. We’ve learned over the last two years – and we’re still learning – if we can’t find technological solutions for some of the traditional staffing services, we’re in trouble,” said Leora Lanz, associate dean for academic affairs at Boston University’s School of Hospitality Administration , said. “If there’s one small way we can help show employee happiness and gratitude… If that’s another tool to help, it’s a win-win.”

The hospitality tech boom

Hotels have relied more on tech features during the pandemic to offer guests contactless options during a stay. That meant mobile check-in and check-out via a hotel company’s app was fast becoming the norm, and digital room keys replaced the need for plastic key cards.

“If you remember, mobile key check-in was initially reserved for frequent travellers. If you don’t offer it to everyone now, you won’t be competitive,” said Daniel Lesser, CEO of LW Hospitality Advisors. “Ultimately, all this stuff becomes standard.”

TPG has reached out to big hotel companies like Marriott, Accor, and Hilton to see if something similar is in the works. Hilton seemed furthest to offer something similar to Wyndham.

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“We continue to evaluate ways to support both our guests and our team members as more stays move fully cashless, and provide the right services to meet evolving needs,” a Hilton spokesman said in a statement TPG. “We continue to test various app-based solutions at select hotels to assess how we can most effectively capitalize on the opportunity.”

When it comes to mobile tipping options, hotels need to take tax considerations into account and ensure the tip ends up in the right hands. According to Wyndham, tips are either deposited directly into a team member’s bank account on a daily basis or distributed along with their regular paychecks.

Taxes are automatically deducted when a hotel owner chooses to distribute tips with regular paychecks; With daily distribution, no taxes are withheld. Instead, at the end of the year, a team member would be given a tax form for that extra income to file themselves.

Tip your householders

While mobile tipping may seem like a no-brainer in some respects, there are also questions about how many people will use the service.

QR codes may be the norm these days, but for hotel guests, the codes are still an additional platform to juggle. Guests might prefer something more consistent instead, like direct integration with the Wyndham app.

A 2019 analysis of Uber’s tipping feature, launched two years earlier, showed that nearly 60% of riders never tipped, the National Bureau of Economic Research found from data from more than 40 million trips.

“That notion of being ashamed of not tipping goes away when you can tip on your mobile device,” said Nicolas Graf, associate dean at New York University’s Jonathan M. Tisch Center of Hospitality. “They have this kind of social pressure to tip in the real world as opposed to digital tipping on your mobile device where they don’t necessarily see it.”

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Wyndham’s Strickland, however, cited a Bené statistic that found that people are five times more likely to tip if they have a mobile platform to do so.

The company has already made adjustments to the feature, including adding a team member photo next to each employee’s corresponding QR code. Guests were more likely to tip if there was a photo of the person who would receive the tip.

In addition, the company sees the QR offering as the easiest way to give tips to team members. This is because not every Wyndham hotel guest has the Wyndham app downloaded to their phone, but QR codes are very common today.

It’s not the first major shift on the hospitality tipping front. Danny Meyer’s Union Square Hospitality Group — the parent company of restaurants like New York’s Union Square Cafe and Gramercy Tavern — eliminated tipping in 2015.

Instead, the company chose to raise prices under a “hospitality inclusive” policy, amid criticism that tipping led to unequal pay. The no-tipping policy increased hourly wages, but USHG reversed course in 2020 when restaurants reopened after the pandemic shutdown.

This served as a reminder that while tipping could spark debate, it still remains an important source of income for the sector as a whole.

“That would be a big shift and a big shift in the industry and I don’t know how the unions would react to that. I don’t know how the staff would react to that,” Graf said of the introduction of a zero-tipping policy at hotels in favor of higher wages. “That’s a very, very tricky question.”

SELECTED PHOTO BY GETTY IMAGES.



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