The hotel industry is being hampered in its recovery by a shortage of labor.
The global pandemic is being blamed for the issue because many employees left the sector as hospitality businesses were forced to shut for months on end in 2020 and, again, in the first few months of 2021.
Other workers may have health concerns about returning to work safely and a portion, especially in the U.S., are still receiving unemployment support from government.
A recent survey from the Hospitality Asset Managers Association reveals availability of staff as the top concern followed by customer demand and labor costs.
The concern was echoed during recent earnings calls with one senior hotel executive describing it as one of the most important issues currently.
Chris Nassetta, president and CEO of Hilton, went on to say that it is “constraining recovery at certain times” because hotels can’t secure enough staff to service properties.
He also said it would lead to pressure on wages at least in the short term but that the situation would “stabilize and work itself out.”
A recent note from credit ratings company Fitch confirmed similar staff shortage issues in the U.K. also highlighting Brexit as a cause, and said it expected the cost of hiring and training to increase in the short term.
“However, we anticipate these pressures to gradually dissipate and the sector to increasingly recruit within the U.K., including employees laid off from other client-facing sectors - such as retail due to shop closures.”
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Nassetta detailed some of the factors compounding the problem in the U.S., such as health concerns, childcare issues and the Federal top-up payments which expire in September.
He said that while the measures made total sense at the time the jobs are there now for people to come back to.
“I think it’s three million of our industry folks that are still out of work. I think by the time you get to September, October, the vast majority of those could easily be re-employed given what I think demand will be in the business. And that's best for the country. It's best for the individual team members, but it's at the convergence of all of that. So I think it's going to be tough.”
Paul Edgecliffe-Johnson, chief financial officer of InterContinental Hotels Group, also acknowledged the difficulty in hiring people for its hotels as they open up, in the group’s Q1 2021 earnings.
Emerging startups
With the hope that the situation will resolve itself after the summer, hotels need to find ways to fill the gaps as pent-up demand for travel is unleashed.
The labor shortage coincides with the emergence in recent months of startups, on both sides of the pond, to help address some of the recruitment challenges in the hospitality industry.
Fiona Robson, co-founder of The Hospitality Gig, a platform aiming to provide a talent pool of flexible workers for the industry, says hotel companies might not be as “forward-thinking” as other sectors despite the shortages.
“While there are indeed challenges with staffing, many hotels who have engaged with us are still looking for more traditional methods eg they want someone to do the full recruitment or selection process, rather than embracing the more cost-effective solution that a marketplace platform offers.”
She adds that the platform has had more uptake from related sectors such as hospitality technology, private individuals and industry associations than hotel groups.
“This ties into one of the key industry concerns that we will lose talent out of pure hospitality roles.”
Rachel Moosa, co-founder of the UK-based business, says the hope the is that the industry will be “open minded to fractional, and gig working talent” rather than traditional recruitment models.
“The traditional employment model does not provide flexibility for the workplace, nor the workers. We hope to move the focus of employment towards job output, which creates more inclusive businesses for all, where workers are valued for what they bring, not for the ability to show up at work.”
Mogul, which describes itself as a “hospitality engine”, is another startup whose emergence has coincided with hospitality industry staff shortages brought about by the pandemic.
The company, which attracted $20 million in funding in late 2020, offers services including MogulRecruiter which says it uses data science and a proprietary algorithm to help hospitality employers find candidates.
Yvonne Choi, co-founder and head of development, says the latest iteration of MogulRecruiter, which has just been released, now ranks talent or “Moguls” against various criteria.
Choi says that customers of the company confirm the labor issues but that they tend to be at the front of house level.
MogulRecruiter currently provides candidates for general manager and supervisor level but plans to expand its database later this year.
Creative thinking
Hotels will now need to think creatively and find ways to fill the gaps whether by turning to startups in the sector or attracting employees in other ways.
Increased digitization is already being viewed as a way forward - making hotels more efficient by freeing up staff for other tasks.
Touchless technologies should also help minimize risk for staff as they return to work safely, reduce manual processes and hopefully give the bottom line a much needed boost as well.
But any digital and technology enhancements and additions will have large shoes to fill for cash-strapped hotels which are physical places that evoke human emotions.