Hotel bosses are finally getting it: People don’t want to work for them anymore

A hotel worker is making a bed.
Americans are quitting their jobs over wages, benefits, and working conditions - all things the hotel industry is notoriously bad at.
  • Hotel CEOs are finally acknowledging that the industry needs better wages and benefits.
  • Employment has plummeted during the pandemic, and average wages are below those in other industries.
  • "We've got some heavy lifting to do" to encourage staff to return, Marriott International's CEO said.

Hotels are struggling to hire as years of low pay, long hours, and poor benefits catch up with them.

Hotel chain CEOs are acknowledging that they need to rethink how they pay workers in order to plug huge gaps in the workforce, according to comments made Monday at a hospitality-industry conference hosted by New York University, reported by industry news site Skift.

The US is suffering from a huge labor shortage as workers quit their jobs over wages, benefits, and working conditions - all things that the hotel industry is notoriously bad at.

The sector has about 300,000 fewer workers than pre-pandemic, preliminary Bureau of Labor Statistics (BLS) data from October shows.

David Kong, CEO of BWH Hotel Group, which owns brands including Best Western and SureStay, acknowledged during Monday's conference that "we're not known as the highest-paying industry or the one providing the most benefits," per Skift.

Anthony Capuano, CEO of Marriott International, said at the company's earnings call on November 3 that it was "seeing some challenges with labor." To encourage people to return to the industry, "we've got some heavy lifting to do," Capuano said at Monday's conference, per Skift.

Peter Ricci, head of Florida Atlantic University's hospitality and tourism management program, previously told Insider that the industry could level the playing field if it got closer to starting wages in other industries.

Companies across the US have been hiking up pay amid the labor shortage, and preliminary BLS data shows that average hourly wages for nonsupervisory staff in the accommodation-services industry reached record highs of $18.17 in September, up from $15.60 in January.

Hotels have been offering other perks to recruit and retain staff, too, such as sign-on bonuses and free accommodation.

But wages are still well below many other industries. The average hourly pay for nonsupervisory staff across all industries on private payroll in September was almost 50% higher, at $26.16, seasonally-adjusted BLS data shows.

Employment in the industry plummeted during the pandemic as hotels laid off staff during lockdowns. The number of Americans working in the accommodation services subsector of the hospitality industry fell by 1 million, or almost 50%, between February and May 2020, per data from the BLS.

As travel has rebounded, more workers have returned to the industry, but many hotels are still short of staff.

"The baggage we carry as a result of laying off so many people in the pandemic … That is a hard one to overcome," Kong said at Monday's conference, per Skift. "People always feel like you're going to abandon them in a crisis and there's no safety net."

Hotels are having to change how they operate to cope with their available staff.

At Hilton, for example, guests now have to opt in to daily housekeeping, rather than being given them automatically.

"I'm of the view that housekeeping will be transformed in this industry," Keith Barr, CEO of IHG Hotels & Resorts, said at Monday's conference, per Skift. "When you're at home, do you change your sheets every day? Do you wash towels every day?"

Barr added that customer-satisfaction scores were falling across the industry.

But the CEOs appear to think that the worst of the labor shortage is over.

Hilton CEO Chris Nassetta said at the company's earning call in late October that hiring was slowly returning to pre-pandemic levels.

And at Marriott's earnings call, Capuano said: "We do still have many open positions to fill, but we are seeing a bit of an uptick in applicant flow and have been filling jobs pretty steadily over the last several months."

Expanded Coverage Module: what-is-the-labor-shortage-and-how-long-will-it-last
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