Seemingly straightforward tasks, when performed manually, can open doors to discrepancies and oversights that can have big ripple effects and big costs.
At 2:45 pm on May 6, 2010, Wall Street experienced a sudden and severe shock. Within moments, the stock market plummeted 1000 points, baffling traders, analysts, and the business press, and erasing $USD 1.1 trillion in investor value.
The event is believed to have occurred because the letter “B” was mistakenly used in a sell order instead of the letter “M,” which changed the sell order from “million” to “billion” and set off a cascade effect in the automated financial markets.
While this may be the best known example of small human errors causing big problems, it’s not the only one. Some more examples:
Japan’s stock market was shaken when a supposed typo resulted in $USD 617 billion worth of erroneous stock orders in several major Asian corporations. These orders were later canceled.
A typo by an official at the Canada Revenue Agency resulted in a $CAD 283 million error on a financial report for one of the country’s largest charitable foundations.
Members of the Shropshire Council in the UK mistakenly voted to support an extra £95 million for a relief road due to an error in a report. This typo increased the estimated amount for the road from £87m to £182m.
A silent drain on resources and finances
Human error can have a profound effect on a business’s bottom line. The seemingly straightforward task of data entry, when performed manually, can open doors to discrepancies and oversights that can have big ripple effects.
This is just one of the processes that can and should be automated but often isn’t. Manual processes in all areas of a business are a silent drain on a company’s resources and finances. They are inefficient, and use up time and resources that could be better allocated elsewhere. If you are still using manual processes in your spa, wellness, or hospitality business, you should consider moving towards automation.
According to research:
- Half of workers at organizations with limited digitization spend at least two to three hours per workday on inefficient processes. (Formstack)
- 72% of employees think inefficient processes impact their job. (Formstack)
- 86% of digitally optimized organizations say improving the customer experience is a high priority. (Formstack)
- 62% use workflow automation to provide a better experience for customers. (Formstack)
- 80% don’t find it very challenging to meet customer expectations. (Formstack)
- 59% of information workers estimate they could save six or more hours a week if the repetitive aspects of their jobs were automated. (Smartsheet)
- 72% say they would use that extra time to do work that is more valuable to their organizations. (Smartsheet)
The monetary cost of manual processes
How does that translate to direct costs? Entrepreneur reported that research by IDC found companies lose 20 to 30% of their annual revenue to inefficiencies.
If we average that cost to 25%, for a spa making $USD 924,000 – the average annual revenue for a US spa as reported by ISPA in 2023 – that equals an annual loss of $USD 231,000.
Can you afford to lose that revenue? Probably not.
More ways manual processes are costing you
For more context, let’s list some more of the ways manual processes are costing spas, hotels, and wellness businesses.
Inefficient use of staff time: As stated, staff time spent on manual administrative tasks could be better spent or attending to guest needs. For example:
- Relying on manual processes for selling gift cards or certificates is time-consuming and inefficient.
- Manually managing loyalty and membership programs is not only time consuming but leads to inconsistencies, missed opportunities for member engagement, and potential inaccuracies in members’ accounts.
Guest experience delays: Manual check-ins and check-outs lead to longer wait times, negatively affecting guest impressions right from the start of their visit.
Booking errors: Without a centralized and automated booking system, double bookings, overbookings, or missed reservations can lead to disgruntled guests and potential loss of revenue.
Personalized service inconsistency: Manual recording and tracking of guest information can lead to variations in personalized service. Preferences and special requests of returning guests might be overlooked without a standardized system for capturing and referencing these details.
Lack of real-time insights: Without an automated system, it’s challenging to get real-time insights into occupancy rates, spa appointment availability, or guest preferences. This can hinder upselling or cross-selling opportunities.
Billing mistakes: Manually calculating bills, especially for guests receiving multiple services across the hotel and spa, can lead to errors, which can result in revenue leakage or disputes (see also: integrations).
Security concerns: Paper registration forms or feedback forms filled out by guests can be lost, damaged, or accessed without authorization.
Resource wastage: Manual processes in housekeeping or spa inventory management can lead to inefficiencies, overstocking, or shortages.
Inadequate marketing: Without digital and automated tools, companies will miss out on gathering guest data that can be instrumental for targeted marketing campaigns or loyalty programs.
Employee training and turnover: High reliance on manual processes requires continuous training, especially in establishments with high staff turnover. This can be time-consuming and costly.
Environmental concerns: The excessive use of paper and other resources can negatively impact both the environment and a hotel or spa’s image with environmentally conscious guests.
Feedback and reviews: Manual collection and analysis of guest feedback can be slow, making it challenging to address concerns promptly or capitalize on positive feedback.
Yield management: If you are employing yield management, adjusting rates based on market factors and demand, manual systems can slow this process, potentially resulting in lost revenue opportunities.
Adopting digital solutions, integrated software platforms, and automation technologies is essential for hospitality businesses to enhance guest experience, streamline operations, and remain competitive.
Spa Executive is published by Book4Time, the leader in guest management, revenue and mobile solutions for the most exclusive spas, hotels, and resorts around the globe. Learn more at book4time.com.
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