NEW YORK — Hotels generally were more prepared for staffing requirements going into this summer travel season, largely due to lessons learned in the past two pandemic summers, but the lingering labor shortage means solutions also are limited.
In a roundtable discussion among members of the Lodging Industry Investment Council, First Hospitality President and CEO David Duncan said in the summer of 2021, his company's hotels were forced to constrain occupancy because there wasn’t enough staff available to clean rooms quickly enough. Revenue managers had to strategize around availability of housekeeping.
Strategy often developed on the fly has materialized into new models for hiring and staffing across the hospitality industry.
First Hospitality began hiring and staffing its hotels three to four months in advance of the summer, and now has the resources and ability to train for peak demand periods, Duncan said.
“We had this false expectation as we furloughed folks that we’d just ask them to come back and they’d all come running back,” he said. “We’ve all realized that it’s a very much different labor market.”
In addition to hiring earlier and training, First Hospitality is being specific about job requirements, including making concessions for staff that it did not previously, Duncan said. For example, housekeepers are permitted to end their shifts at a specific time if being picked up by a relative.
“And if the room isn’t clean, that’s OK,” he said. “We’ll let them go to the next day.”
Being flexible to meet employees’ needs helps staff retention, Duncan said.
“There are a million lessons learned, but a lot of them are small things like that, that are sort of micro-adjustments that change the macro,” he said.
Hoteliers have learned and become better managers, both at the hotel level and at the corporate level, said John Rubino, president and chief operating officer at GF Hotels & Resorts. His company made the decision two years ago that positions that could become remote would be, and some teams could adopt a hybrid model of in-office and at-home work.
That decision over remote work allowed GF Hotels & Resorts, based in Philadelphia’s City Center, to attract people from all over the U.S., he said, adding that he initially wondered whether allowing remote work could result in hindering the return of business travel.
The hotel industry has become more agile overall because of the pandemic, said Andrea Foster, senior vice president of development at Marcus Hotels & Resorts. It caused companies to be more flexible, particularly with schedules but also with pay.
“We have created this agility, this flexibility in our industry that allows us to maintain that going forward and to be more flexible and understanding,” she said. “It's a different operating model, and we can be responsive going forward because we've set it up as kind of a new standard.”
Guest Satisfaction
Guest satisfaction in the hotel industry is heavily reliant on brands and their standards for cleaning guestrooms, Rubino said.
Some hotels still are not offering daily housekeeping, and guests who might have been more accepting at the height of the pandemic are now demanding better service for the higher rates they are paying, he said.
It was unheard of before that hoteliers would let rooms go and not be able to sell them, he said.
“As an industry, we all became accepting of that, that we couldn’t get those rooms on the market because we couldn’t clean them,” he said. “It’d be something to be angry or embarrassed of before, but we all did it because we had to brace.”
PM Hotel Group President and CEO Joseph Bojanowski said he expects this year’s J.D. Power hotel guest satisfaction survey to come in with results that are “significantly lower” than 2019 and probably lower than 2020.
Housekeeping, food and beverage offerings and quality of service will likely be the areas of greatest concern, he said.
The struggle with housekeeping a year ago was that guests saw when booking online their room wouldn’t be serviced each day, Rubino said. They also received that reminder when they checked in, but when told of the option to have their room cleaned each day, the staffing wasn’t necessarily there.
“I remember we struggled with wanting to communicate that to them, to give them the option, because they're coming down on the next day and saying, ‘My room wasn't cleaned,’” he said. “I think that was a big struggle, and I don't think is there as much now because I think the guest doesn't expect it to be cleaned.”
When guests started traveling for the first time during the pandemic, many hadn’t interacted with other people in a while, resulting in some surly guests, Foster said. There were several stories about negative interactions between customers and hospitality employees, but in general people are friendlier and less stressed now, she said.
Environmental, Social and Governance
Hotel companies must embody the environmental, social and governance initiative, Bojanowski said, because of the overall interest in it from both groups and business travelers.
“It can’t just be a check the box,” he said. “It has to be demonstrated, and you have to have a practice.”
The Securities and Exchange Commission fined BNY Mellon for fraudulent ESG disclosures, and Deutsche Bank’s offices in Germany were raided for “greenwashing” their disclosures, said Zahara Kassam, advisor for corporate finance and restructuring, real estate solutions, at FTI Consulting.
“It’s no longer a ‘nice to have,’” she said. “You have to at minimum report.”
From a business perspective, it makes sense, Kassam said. An entire building in Miami collapsed, killing many people, and that’s something that could happen to hotels over time.
“You have to go into an investment thinking about the resiliency and asset preservation because we have seen that climate change is happening,” she said. “It’s increasing, and the next generation cares a lot about it because who knows what’s left for them to enjoy.”
There’s a lot of money raised ready to be deployed for hotel deals, but disclosures specify that capital will be invested to address ESG requirements, Bojanowski said. There are expectations that if the capital isn’t used as stated, there will be consequences.
With the early retirement of baby boomers 55 and older, millennials are now the largest portion of the workforce, and ESG is one of their priorities, he said.
“That demographic shift is going to probably ensure that it’s permanent,” he said.