Industry NewsFilling the Void: Industry Leaders Chart Incremental Labor Progress Following Pandemic

Filling the Void: Industry Leaders Chart Incremental Labor Progress Following Pandemic

Most hospitality executives will acknowledge the industry’s property-level labor problems didn’t start with the pandemic, but the shutdown that occurred as a result certainly took the issue to another level, with many workers leaving never to return.

So, as we reach three years since the outbreak of the pandemic, what has been the overall impact of a well-documented labor shortage on an industry built around personal service and human interaction? Furthermore, what kind of progress has been made with regard to attracting and retaining talent during the past few years, and how has the industry as a whole adapted to the “new normal”?

A handful of high-level executives maintain that the industry is narrowing the gap between available workers and open positions in various ways, from attracting workers by offering flexible hours and daily pay to launching hotel brands designed to reduce reliance on labor, such as Spark by Hilton (see sidebar on page 36). However, these experts also collectively acknowledge there is still plenty of work to be done.

According to the AHLA (American Hotel & Lodging Association), the lodging industry currently employs more than two million people. However, there were roughly 900,000 unfilled hospitality jobs prior to the pandemic, and that number has grown to some 1.2 million to 1.3 million.

“It impacts not just daily operations but ultimately profit, ultimately how the industry performs. So, these numbers are critical to change if we’re going to reach maximum performance,” said Chip Rogers, president & CEO of AHLA. A recent AHLA survey of hoteliers revealed that about 85 percent of hotels are either somewhat or severely understaffed, while 22 percent are severely understaffed. The positions that hoteliers are most in need of filling are housekeeping, front desk, culinary, maintenance, and executive/GM. Rogers, however, pointed out that progress has been made in recent months. “These numbers are bad, but they’re actually much better than what we’ve seen,” he said, noting that in May of last year the above figures were 97 percent and 42 percent, respectively.

Tony Capuano, CEO of Marriott International, meanwhile, touted some progress with regard to property-level employees from the perspective of one of the industry’s largest employers, with some 30 brands and more than 8,000 properties globally.

“We still have some challenges, but we hired 190,000 new associates last year and roughly 50,000 of those associates were incremental new hires as opposed to bringing folks back. If you look at the available open jobs in our system now, we’re about where we were pre-pandemic,” he said. Nevertheless, Capuano acknowledged the sea change from an industry perspective.

“Pre-pandemic, my view is that the workforce viewed the travel and tourism sector as a set of safe-harbor industries: ‘People will always travel, there are always plentiful jobs, and it’s a great place to build a career.’ Understandably, that confidence was shaken, and you do have folks that have left the industry, probably for good,” he asserted.

‘Sparking’ More Efficient Solutions: Hilton’s New Economy Brand is Designed to Meet the Labor Challenge

When launching a new flag, brand companies have always had to think about things like development costs, consumer marketability, and positioning. But in 2023 there is one more important consideration: a more efficient labor model. As the well-chronicled labor challenges have escalated for the industry in recent years, reducing the reliance on staff and lowering operating costs has become top of mind for today’s owners and operators. It’s for this reason that the extended-stay segment—and the economy sector to a lesser extent—has flourished over the last several years.

To that end, Hilton recently launched its Spark brand, a premium economy brand targeting conversion opportunities. According to Alissa Klees, brand leader for Spark, a more efficient labor model “was most certainly a consideration” when developing the new concept.

“Where you can gain efficiencies, and where we tried to think about gaining efficiencies in the labor model, is how the room product shows up and how efficient it is for housekeepers to get in and out of cleaning the room,” she said.
Klees compared the labor model to that of Hilton’s Tru and Hampton brands, noting the properties’ staffing requirements are primarily confined to housekeeping and a general manager.

She elaborated on the unique room model for Spark.

“What you’ll see is a lot of flat surfaces, there are not a lot of drawers to go in, and no microwaves. We were really trying to think about the efficiency of the housekeeper getting in, cleaning the room, delivering that reliability, but trying to save the time that they’re in the room. This brand will also have a top-of-bed product that allows a housekeeper to save about three minutes on making a bed. That’s hugely impactful when you’re cleaning 10 rooms a day,” she said. Klees noted that one of the brand’s hallmarks will be consistency as well as technology, including offerings such as digital check-in for guests. She noted that technology is part of what will potentially contribute to the labor efficiency.

“The other area of opportunity we really tried to think through in terms of labor is in the breakfast modeling for this brand. We do deliver a complimentary breakfast. It’s very streamlined and simple: bagels, juice, coffee, and yogurt every day. There’s a lot of labor that goes into executing [a larger] breakfast. For Spark, we think that will be a choice for an owner: whether you want to have a breakfast attendant or can that breakfast be executed through somebody working the front desk at the same time in the morning as checkouts? We try to think about that dual purpose through technology and enabling our front desk,” she said.