Hospitality staffing shortages have plagued the industry since the first few months of the pandemic, with nearly 8 million hospitality jobs lost as a result, according to the U.S. Bureau of Labor Statistics and University of Houston research. And these losses have been felt heavily in the hospitality industry, accounting for loss of revenue and services due to lack of manpower, and some resentment within the industry from disaffected workers who are “unlikely to return to the industry,” according to the UH research. 

According to a January 2023 American Hotel & Lodging Association survey of more than 500 member hoteliers, 79 percent of U.S. hotels are experiencing staffing shortages, with 22 percent saying severely so. The most critical shortage is in housekeeping, with 43 percent tagging it as their top hiring need. Increasing wages, flexibility and incentives are among some of the more common tactics to attract and retain hotel staff, but despite this, 81 percent of respondents said they were still unable to fill open positions, according to AHLA’s recent report. 

There’s some good news even in these stark numbers, according to AHLA CEO Chip Rogers. AHLA sees a “steady decline” in the percentage of the association’s 32,000 member hotels reporting they are short-staffed, “but it’s still at alarming rates,” he said.

January’s data showed an eight percentage-point improvement from AHLA’s September 2022 survey, in which 87 percent of respondents reported they were short-staffed. In the fall, 36 percent reported being severely short-staffed, compared to today’s 22 percent. Still, housekeeping hasn’t budged from being the top hiring need—and at the same intensity, with 43 percent of respondents highlighting their need for more housekeeping crew.

The Key Data Point

The more important number to Rogers and the one he said AHLA “member CEOs would be looking at,” is that in September, “more than one-third of hotels said that they were severely [under] staffed in a way that was affecting operations.” That operations-critical rate now is down to 22 percent, which Rogers underscored still is close to one out of every five hotels. “We’d love to get that down to zero, but it is certainly improving,” Rogers said. 

According to AHLA’s 2023 survey, respondents are attempting to fill an average of seven positions per property, down from 10 in September 2022. 

Hotel employment still is down by nearly 237,500 jobs compared to February 2020, according to the U.S. Bureau of Labor Statistics. Still, this problem isn’t exactly new, according to Rogers.

“We’ve been one of the leading sectors of job growth. But even with that recent spurt of growth, we’re still considerably behind where we were in 2019,” he said. “But more importantly, [we’re] considerably behind where we need to be as an industry to make sure that all hotels are operating at maximum efficiency.” Recalling a time when the industry was well-staffed “exceeds my recent memory,” according to Rogers. “It has been a challenge for many, many years.” 

Rogers’ larger concerns highlight a broader issue of opportunity awareness and employee retention within the hotel industry. Nearly half of respondents from a November 2022 Instawork survey of 180 hospitality businesses, ranging from hotels to food and beverage providers, reported losing 25 percent of more of their labor force to “churn” in 2022, aside from any residual effects of the pandemic. With U.S. hotel demand projected to surpass pre-pandemic levels at 1.3 billion occupied room nights in 2023, according to AHLA’s 2023 State of the Industry report, and nearly 80 percent of hotels experiencing staffing issues, staffing shortages appears likely to persist.

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What Are Hotel Executives Saying?

Several industry executives and analysts at the 2023 American Lodging Investment Summit in Los Angeles reported staffing as a top concern for the year and noted continued impediments to bringing levels back up to snuff.  

“Labor and staffing is top [focus],” McKinsey & Co. senior partner Danielle Bozarth, a coleader of McKinsey’s travel, logistics and infrastructure practice, said during an ALIS panel discussion. She also noted that “wage inflation has happened at historic levels,” for the hotel industry and that “the use of contract labor and the amount of overtime [required due to being understaffed] is kind of a hidden cost factor” for hotels that are scrambling to keep up with demand.

To Bozarth’s point, staffing shortages can be costly for many reasons, and hospitality players, including hotels, have estimated those losses.  

According to Instawork’s report, 77 percent of respondents reported they had foregone potential revenue due to insufficient staffing, more than half of them projecting they had foregone more than 5 percent of potential revenue.

Those hotels that can make it happen, however, are realizing the dividends, according to Remington Hotels CEO Sloan Dean. “In 2021, we got our staffing back to 2019 levels,” he told BTN in a recent interview.“Bringing employees back faster than our competitors lent to us converting more group business,” he said.

Some hotel groups have looked to permanent service changes within their brands to rebalance their business models against staffing realities. Marriott International president and CEO Anthony Capuano spoke recently to BTN about formal housekeeping changes that have taken effect among Marriott brands. 

“We have rolled out a new set of protocols [and] they vary a bit by tier,” Capuano said. “At our destination resorts and luxury hotels, our guests should expect exactly what they experienced prior to the pandemic: full housekeeping each and every day. In our full-service hotels, they should expect a daily refresh making of the bed, etc. In our select-service hotels, they should expect [a] refresh every other day. The important caveat, ultimately, is that if the guest wants a modification to that standard protocol, all they need to do is ask.” 

Certain segments of the hotel industry were spared a little from the worst of these challenges, notably parts of the extended-stay sector that long have had a lean staffing model.

“Obviously, wages have gone up a little bit to help attract and retain, but [a] beautiful thing about extended stay is the labor model is lean on purpose,” Choice Hotels VP and general manager of extended stay brands Anna Scozzafava said. “You’re not cleaning rooms every day. The turnover [is] so much less.” 

As a result, she added, “In the economy extended-stay space, you might only have five to seven full-time employees. So we’ve been able to get back there for a while.” 

What Can Be Done 

According to Instawork’s survey, 72 percent of respondents used more flexible workers in 2022 than they did in 2021, and the use of temporary or flexible staff continues to grow. Seventy-three percent of Instawork’s respondents plan to use them in 2023. Industry executives are likely to view temporary staff as a solution of last resort, however, since the cost of training them can be significant, with less expectation of keeping them around.

“Some folks were using some contract labor, but we’re not seeing that so much anymore,” said Scozzafava.

Beyond temporary staffing, hotels have other strategies to attract and retain hospitality employees, including what AHLA called record-high wage increases. According to University of Houston research, which cited distrust as a major blocker to re-staffing hotels, businesses should couple better compensation with benefits, better protect workers’ health and rebuild trust with their employees.

“I think by and large, people who were laid off or furloughed during the pandemic probably moved on to different industries altogether,” Hilton College colleague, Ph.D. candidate and teaching fellow Iuliana Popa said in UH’s research. “Something more stable and less dependent on those in-person interactions where their skills were transferable, like business or real estate.”

AHLA’s Rogers added better training to that list of employee-retention methods, to ensure employees understand what is expected of them and have the skills and control to execute against those expectations. And that training needs to happen fast—before workers decide to abandon their posts. 

“The turnover rate is alarming,” Rogers said of industry churn. “What people are telling us as to the reasons why they’re leaving the industry is a lack of training on the front side.” Making sure employees have the proper training, “particularly among housekeepers,” is critical, he said, as the “key time period for a housekeeper to decide whether they’re going to keep up with this job or move on is about the three-week mark.” 

What AHLA wants to underscore more than anything, however, is that there has never been more opportunity in the hotel industry than there is now to build a career that returns personal and financial dividends. And few industries can compete with what hospitality can provide, including career-growth trajectory. 

“Right now, hotel wages are rising at [a rate of] about 24 percent. The rest of the economy is at 15 percent. … That’s a considerable increase over the rest of the economy and that $23 per-hour wage rate is higher than it’s ever been,” Rogers said. “When you combine that with the opportunity to build a career quickly, I think you’re in a pretty special place right now.”

In the meantime, Rogers said, the industry has work to do to raise awareness and continue to attract workers by conveying more stability, benefits and opportunities. “I think the gap will continue to close,” he said, “but the gap was so enormous, the pain is still being felt at the property level.”