Industries economy-wide are suffering a shortage of workers, as the U.S Bureau of Labor Statistics (BLS) in December 2023 reported that there are nearly three million more job openings than unemployed people to fill them. The hotel industry, however, has been suffering from a dire shortage of workers since the end of the pandemic, as many hotel workers laid off during the Covid19 lockdown never returned.
“We probably have 80 per cent of our workforce back,” affirmed Robert Rauch, chairman and chief strategist for Hotel Guru, a hotel management start-up and former co-founder and CEO of RAF Hospitality, which owned and operated 24 hotels in Sothern California. He says that it’s still hard to find skilled, experienced staff, as many workers left the hospitality industry during the pandemic lockdown and took jobs in other industries. But the hiring situation is not as quite as difficult as it was two or three years ago.
“Less populated cities have higher unemployment levels, and hence there is more interest in hotel jobs,” Rauch continues, noting the unemployment is very low in Southern California, so it is more difficult to recruit workers.
While the situation is slowly improving, Kevin Carey, interim president and CEO of the American Hotel and Lodging Association (AHLA), told Hospitality Investor, ”Staffing will remain a significant challenge for U.S. hotels in 2024.” He noted that hotels are projected to add about 45,000 employees this year, but the total hotel labor force will still be down nearly 225,000 workers from 2019, when the industry employed 2.36 million people.
In an AHLA survey of hoteliers conducted in January 2024, 67 per cent of respondents said they are experiencing a staffing shortage, 12 per cent of which said they are severely understaffed, with critical need in housekeeping. Carey noted that this is an improvement over the survey in May 2023, when 82 per cent of survey respondents were experiencing a staffing shortage. The 2024 respondents, were, on average, attempting to fill a nine positions, which is nearly unchanged from the survey in May, but up from the seven vacancies-per-property average in January 2023.
To recruit and retain workers, 82 per cent of respondents have raised wages over the last six months, 59 percent offer flexible work hours, and 33 per cent improved benefits. In fact, since the pandemic, the hospitality average wage has increased 35 percent faster than the average wage throughout the general economy, up 27.5 per cent, compared to 20.4 per cent, according to BLS data, with the national average wage for hotel employees at a record high of $23.91 per hour in December 2023.
Rauch said, for example, that his company’s labor costs are up 20 per cent, compared to two years ago, due to low labor supply and multiple job openings.
Carey said that hoteliers are getting creative in attracting employees, offering a variety of job perks, which vary by property. This may include greater scheduling flexibility–work as few or as many hours as desired, same-day pay, free in-shift meals, sign-on and retention bonuses, access to amenities (fitness center, pool, etc.), discounted hotel stays, and transportation stipends.
They also are improving benefits, noted Jeanelle Johnson, a principal, lead client partner and Travel, Transportation and Hospitality (TTH) sector co-Leader at the global accounting firm PwC. She said that hoteliers are providing bendfit enhancements, such as expanded healthcare coverage, increased paid time off (PTO), and greater flexibility in scheduling to accommodate work-life balance and cater to diverse employee preferences and needs. Additionally, some hotels also are implementing innovative programs, like remote work options.
Sonesta Hotels & Resorts, for example, now provides health insurance from the first month of employment; seven paid sick days per year and PTO time, as accrued; instant, top-tier status in the Sonesta Rewards Program; a daily pay option; a mentor program; and tuition assistance. The San Antonio Marriott Northwest offers employees bus/train passes, one free meal per shift, sign-on bonuses, and PTO available from the first day, as accrued.
Johnson said that hotels also are investing in training and development programs that nurture talent and foster a culture of career advancement within the industry. They also are leveraging technology that automates processes to reduce the burden on staff members and enable them to focus on providing exceptional customer service.
Noting that his company has adopted a pro-employee culture, Rauch stressed that on-the-job training and flexibility in work hours or days and vacation times are critical beyond pay and benefits. New employees at his company, for example, receive a combination of online hotel brand and management training, as well as participate in a shadow training program conducted by the company’s top employees.
Recruiting strategies vary from posting job openings and highlighting benefits and perks on websites, like Linkedin and Indeed, which currently lists 70,000 hotel job openings to hosting job fairs, employee referral bonuses, and direct recruiting on college campuses, Raunch, for example, pursues students from the San Diego State University’s Hospitality and Tourism Management program.
To fill openings at a new Moxy Hotel in Virginia Beach, Vir., management held job auditions, rather than a job fair, to lure workers. Upon arrival at the event, prospective employees were treated to free drinks and appetizers, while a DJ played music in the background.
Besides attractive compensation and benefits, Danielle Hawkins, a principal in the Human Capital Practice at the global accounting firm Deloitte, said that hotels also are creating a holistic employee value proposition that focuses on the many facets of a relationship an employee/manager has with an organization.
She said that this might include transparency in career-path opportunities and growth; opportunities to develop personal and professional skills and capabilities, such as language, financial planning, leadership, technology and communication skills; nontraditional benefits, such as childcare or wellness activities; and a greater emphasis on a culture of inclusion.
To help with employee retention, Hawkins suggested strategies for developing a career-minded attitude in employees, such as celebrating the stories of current employees’ or executives’ journeys and how they navigated various roles and transitions to arrive at their current position; integrating career development into performance management conversations; and providing career development and growth campaigns and programs focused specifically on the hotel’s frontline employees.
Some hotels are already employing strategies to foster a career mindset among employees, offering tuition reimbursement, leadership development workshops, and rotational training opportunities that expose employees to different facets of hotel operations, she added. “By prioritizing employee growth and development, these hotels are not only attracting top talent but also cultivating a loyal and motivated workforce committed to long-term career success in the hospitality industry.”
To help hotels raise awareness of the industry’s 200-plus career pathways and fill jobs, Carey noted that the AHLA Foundation is focused on growing the industry’s talent pipeline through workforce recruitment and retention initiatives like the AHLA Empowering Youth and Registered Apprenticeship programs.
The Empowering Youth Program is focused on recruiting unemployed young adults, ages 16 – 24, for entry-level hotel positions. The Registered Apprenticeship program, which is funded by the U.S Department of Labor (DOL), combines on-the-job training with classroom education for in-demand occupations, The hospitality-industry provides apprenticeship for cooks, lodging managers, and maintenance workers.
Despite efforts to attract and retain employees, hotels continue to face challenges in fully staffing operations. Carey contended that Congress could address workforce shortages with bipartisan solutions that create opportunities for more workers to enter the American economy by expanding and streamlining the legal H-2B guestworker program.
He called on Congress to pass the H-2 Improvements to Relieve Employers (HIRE) Act, which would expand both the H-2A (temporary agricultural worker) and H-2B labor certification periods to three years and make it easier for qualified workers to secure jobs in fields that are struggling to recruit and retain enough employees to meet demand.
Carey stressed that the DOL’s H-2B program is vital to helping independent hotels and resorts in remote vacation destinations fill seasonal roles, noting that the program is capped at 66,000 H-2B visas each year. This program allows employers to temporarily hire nonimmigrant workers from other countries to fill nonagricultural jobs that last less than one year.
“By growing the pool of seasonal workers, the bill would give seasonal small business hotels critical staffing relief and facilitate the hotel industry’s continued recovery,” Carey continued. “Exempting these workers from this inadequate cap would help hoteliers hire employees who can provide critical staffing relief for seasonal small business hotels and help rebuild the post-pandemic economy.”
He also called on Congress to pass the Asylum Seeker Work Authorization Act of 2023 (S.255/H.R.1325), noting that a historic number of asylum seekers are already housed in hotels across America while awaiting court dates to be legally processed. “Unfortunately,” Carey noted, “Current law prevents them from legally working for at least six months, forcing them to rely on assistance from local governments and communities.”
He explained that this legislation would help hotels address critical staffing needs by allowing asylum seekers to work as soon as 30 days after applying for asylum, provided their applications are not frivolous, they are not detained, their identities are verified, and they not on federal government’s terrorist watch list.