How Hospitality Benefits from Tip and Gratuity Automation: A Property’s Perspective

HOST: Hi and welcome to another episode of Automated Back Office Briefings, I’m your host, Claire Kenney, Evention Marketing Communications Manager.

I am so excited about our guests today and I am so excited about our topic.

Each year, hotels world-wide lose millions of dollars to manual tip and gratuity distribution. Much of this loss stems from manual spreadsheet errors. In fact, according to research from the University of Hawaii and PricewaterhouseCoopers, manual spreadsheets contain a 90% error rate.

Of course, this spreadsheet error translates directly to employee payroll.

Recently, after conducting some industry research, Evention published a white paper on this topic. The paper entitled, Less Cost, Less Error, More Value Add, is available on Evention’s Automated Insights page.

JIM: Good to be here.

DANETTE: Yes, good to be here.

HOST: So, Jim, as you work with hotel properties around the world, of all different sizes to automate their tip and gratuity distribution, you hear about manual spreadsheet pain points all the time. These can stem from data entry errors, formula errors, lack of security/control, and/or a misunderstanding of how to use Excel.

JIM: Right. That’s right. Employee underpayment, employee overpayment, union action, legal action, and, of course payroll errors are all symptoms of manual spreadsheet error. These pain points can cause great mistrust amongst a hotel’s staff, which is never good.

HOST: Can you give us some context and/or examples?

JIM: Sure, Evention has worked with a small Florida hotel that was fined for a $20,000 per year employee underpayment stemming from manual spreadsheet errors. And we’ve seen as much as $70,000 overpayment in service charge distribution annually.

HOST: Right, and we’ve also witnessed $17,000 overpayment to employees over the course of four months.

HOST: Danette, Jim worked alongside you to automate tip and gratuity distribution at your properties.

DANETTE: Correct.

HOST: First, can you tell use a little bit about your property. Balboa Bay. I understand that there are union liabilities and several outlets involved and these outlets are paid out at different rates. 

DANETTE: Correct. (Our properties have attributes like) 160-room hotel in California, Union liabilities, 7 outlets, and outlets paid out at different rates and in different allocations.

HOST: So, what kinds of threats did your properties face before implementing automation.

DANETTE/JIM: 1) 8-10 hours a week to reconcile complex outlet revenue. 2) Increased vulnerability to union fees. 3) High tip and gratuity compliance error rate risk.

HOST: And so, how has tip and gratuity automation addressed these issues?

DANNETTE: 1) It now takes minutes to reconciles thousands of dollars in complex outlet revenue. 2) Individual outlet management reconciles tips and gratuities with a click. 3) Measured and monitored adherence to union regulations.

CLAIRE: Jim, describe this tip with a click.

Jim: Self-service tip outs automatically distribute tip outs directly from any connected device. It integrates comprehensive tracking and workflow. This ensures IRS compliance. And cashiers can manage their allocation with a simple click.

HOST: Well thank you both for coming on today. Special thanks to you Danette for your time with this podcast and for collaborating with us on the white paper/research.

DANETTE: Of course! My pleasure.

JIM: Thanks! And, yes, thank you, Danette!

HOST: And again to our listeners, if you’d like to learn more about leveraging automation to facilitate tip and gratuity distribution, head to our website, www.eventionllc.com to download our white paper Less Cost, Less Error, More Value Add: Tip & Gratuity Management Automated. You can find it on our Automated Insights page. 

And to close out our episode, we have Eventioneer of the Month and Client Success Consultant, Kian Zanganeh, joining us. 

Hi, Kian. Thanks for coming on!

KIAN: Yes, of course, Claire. Thanks for having me.

HOST: What is your favorite thing about working at Evention?

KIAN: I like helping client solve their problems and learning something new every day.

HOST: How do you spend your time when you are not working? What are your hobbies?

KIAN: I love to bike around Lake Michigan here in Chicago and eat too much.

HOST: Fun fact?

KIAN: I won my middle school talent show doing the Napoleon Dynamite dance, and my family makes me watch the DVD every Christmas.

HOST: Can you still do the dance years later?

KIAN: (Laughs) I remember the beginning.

HOST: Well, we won’t make you do it for us here. Thanks again Kian for coming on.

KIAN: Thanks, Claire!

HOST: And to our listeners, thank you for listening! Follow Automated Back Office Briefings on Spotify, Apple Podcasts, or your preferred podcast platform.