The True Impact of Tips at Hotels

Tipping has always been a common practice in the hospitality industry. It shows an appreciation for the employees and is an essential addition to their paychecks. Positions such as servers and bartenders are easier to recruit thanks to the boost to pay tipping provides. According to an economic study by Glassdoor, tips make up, on average, anywhere from 70-80% of the total pay for tipped employees. The federal minimum wage for tipped employees is $2.13 per hour. While companies typically adjust based on average tips received, these associates still earn lower hourly pay than non-tipped employees.

In recent years, there has been a decline in cash-carrying and a movement toward “cashless payment.” Bars and restaurants can still accept tips when guests add gratuity to a card payment, but non-revenue generating centers have taken a hit. A study by Cornell University shows, respondents already don’t feel obligated to tip hotel housekeepers, compared to bartenders. This is a significant loss of planned income for housekeepers, front desk agents, and porters because there isn’t a process to accept digital tips.

According to ZipRecruiter, the average annual Hotel Housekeeper salary as of February 2023 is $25,958, about $2,163 a month (before taxes). In order to augment the annual base salary, tips become an important part of their overall compensation. When guests choose not to tip or can’t because they don’t have a digital option, these employees lose significant wages. The solution the industry is moving towards is digital tipping platforms.

One example of this is Evention’s InstaTip solution. Guests can tip instantly, and the gratuity is automatically reconciled and allocated to the payroll. Although other gratuity acceptance platforms are on the market, Evention found that properties with InstaTip have increased tips by double digits. Where the average tip per guest was $5, the new average tip is up to $12. This benefits staff and enhances the guest experience by incentivizing outstanding work. The future of property technology includes digital tip acceptance in all parts of the hotel. Organizations with high GSS scores and satisfied employees implement these solutions, ensuring retention and quality recruits.

If you’re looking to implement a comprehensive digital tipping solution, learn about the value of InstaTip in your business. Follow this link for a complimentary demo: