labor challenges in the hotel industry

Labor Challenges In The Hotel Industry

The hotel industry is currently facing a labor shortage and according to the U.S. Bureau of Labor Statistics, approximately 2 million hospitality posts remain vacant. However, in a study conducted by,  69% of respondents claimed nothing would change their minds about re-entering the hospitality industry. Ultimately, labor challenges in the hotel industry can be attributed to several factors, including these four causes:

1. Increased workload for employees

Hospitality jobs are labor-extensive, and housekeeping and maintenance services require more physical exertion as opposed to a desk job. Coupled with longer work hours, employees experience workplace stress. According to The American Institute of Stress report, workplace stress caused by increased workload causes approximately 1 million employees to miss work daily. Sequentially this leads to labor shortages. 

2. Poor work-life balance

Most job seekers’ top consideration is flexible work arrangements that enable them to prioritize their mental wellness. Irregular work hours can lead to burnout, especially for employees who have children or other responsibilities to take care of. When hospitality roles leave little consideration for mental well-being, employees experience work burnout and may decide to leave their jobs for something less taxing. 

3. Underpaid hotel employees

Most hotel owners are not willing to pay the wages demanded by their employees. This factor makes hotel industry jobs less attractive. Nearly 13,000 hospitality workers who are not willing to return to their jobs are leaving the industry altogether to find other high-paying jobs.

4. Competition from other industries

Increased competition between companies hiring talent is also another cause of labor shortages. 

labor challenges in the hotel industry

Poaching of experienced employees is becoming a competitive sport. Individuals are discovering new opportunities in other competitive industries. Hospitality workers are shifting to these industries for reasons such as getting higher pay, more schedule flexibility, attractive benefits, and different work environments altogether. 

Labor shortages affect all hotels

Although the U.S. hospitality industry is diverse, labor shortages affect all hotels regardless of size and location. When there is a shortage of employees, hoteliers experience a compounded effect potentially impacting every aspect of their business from customer service to housekeeping to maintenance. In the end, this contributes to increased operational costs which may result in higher room rates or reduced profits.

Impact of labor shortages on the hotel industry

Labor shortages have adverse effects on the hotel industry resulting in suboptimal guest experiences, customer satisfaction scores or restaurant shutdowns. Shortages have also contributed to reduced service provision in resorts and hotels as well as flight cancellations. Since most hotels lack a skilled workforce to attend to guests, many operate with fewer restaurant tables and reduced room inventories to ensure service standards are achieved. 

Furthermore, as hotels strive to meet guest expectations, the labor shortage intensifies the risk associated with employee burnout. With labor shortages, the current employees are overloaded with more work which leads to reduced morale. Existing employees must work longer to compensate for the labor shortages leading to even more job losses. A short-staffed hotel can compromise the health and safety of the existing team.

How hotels can overcome labor challenges

The success of a hotel depends on the motivation of its employees. Therefore, campaigning for fair wages, flexible work schedules, and investing in team training has never been more pivotal in keeping employees motivated and mitigating labor shortages. The following are some strategies hoteliers can take to overcome labor challenges in the hotel industry.

1. Foster a good company culture

Addressing labor problems at the company level is a crucial step. This includes creating a company culture that is welcoming to all employees especially as employees become more selective about where they want to work. Employers in the hotel industry should strive to create a work environment that is engaging, accommodating, and fulfilling. It’s also important to offer a safe haven for hotel employees so they feel comfortable seeking and giving feedback. As a hotel manager, fostering a workplace community that celebrates employees’ milestones is key. 

labor challenges in the hotel industry

2. Digitize hotel processes

The hospitality industry is experiencing real change due to the growing demand for digitization. The benefits of digitization are endless. For instance, technology allows for optimized internal communications, such as cross-departmental collaboration and transparent exchange of information. Furthermore, digitization will reduce the workload on staff members. An example is that robot technology is becoming common in hotels since they can collect more data than conventional staff members.

An example is Hotel EMC2 in Chicago which uses robotic staff members Leo and Cleo to improve customer experience. Thanks to automation, reservations, check-ins and guest communication have been simplified.

3. Offer financial security

Hospitality companies must address wage dissatisfaction to keep employees happy and motivated. Moreso, hotel employers should strive to offer more than just a wage increase. It is time for hospitality brands to offer benefits that meet employee needs. For example, hotels can offer retirement savings support or financial counseling. Taking the extra step to provide employees with what they need shows the management’s commitment to their financial wellness in the long term.

4. Promote different forms of work schedules

Offer flexible work schedules that work around the rhythm of employees’ lives and consider offering sabbatical leaves. Part-time, casual, full time and temporary agency work is crucial for retaining employees. In addition, having different forms of work will allow employees to be flexible and perform other commitments, such as domestic and educational responsibilities

Consult our newgen advisory experts today!

At NewGen Advisory, we believe hoteliers can adapt and mitigate the causes of labor challenges in the hotel industry. Our mission is to help hoteliers around the globe by providing them with tailored solutions to their problems.  We are also dedicated to ensuring hoteliers put in place sustainable innovations that help them remain profitable in the hospitality industry. Some of the services we offer include asset preservation, hotel brokerage, and hospitality expertise. Contact us today for more information.


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