Nearly every industry across the globe is feeling pinched by the staffing crisis. Employers are not only struggling to find available talent, they're also falling behind on training them, according to Valor Hospitality Partners Global Partner and CEO Euan McGlashan.
"Right now, I fear ... we're probably in the worst period because people are talking about staff shortages but they're not talking about how, right now in this industry, we're the 'Great Untrained,'" he said. "What's happening is the labor crisis is so bad, people are just taking warm bodies and throwing them straight into action, into the battleground."
McGlashan said many of the complaints he's hearing on the service side are related to lack of staff training.
The recent J.D. Power 2022 North America Third-Party Hotel Management Guest Satisfaction Benchmark survey notes guest satisfaction fell four points on a 1,000-point scale this year.
"The survey said that beyond investing in the physical aspects of a hotel, focusing on service training for staff can have an immediate effect on improving the guest experience. Overall satisfaction scores are 139 points higher when guests feel valued. Scores also improve by 135 points when staff show concern for guests' needs or provide 'warm, sincere treatment,'" HNN's Bryan Wroten reported.
McGlashan said Valor Hospitality Partners — an Atlanta-based full-service hospitality acquisition, management and development firm — is leveraging its Future Leaders program across the U.K and U.S.
The program weaves in training to grow the team internally and increase employee engagement, he said. Valor has invested into human resources to support these initiatives.
"We can't be the 'Great Untrained,'" he said. "If there's one industry that you can't have untrained people when the guest is looking for a great experience and you have to deliver, [it's hospitality]."
His company's philosophy is to hire for personality, then train employees with the necessary skills.
Through Valor's Future Leaders immersive training, employees are taught ways to build their emotional and social intelligence, self-awareness and confidence, as well as other topics relative to the industry today.
"Our business is massively complex. You've got to be a manager, you've got to be a boss, you've got to be a friend, you've got to be a leader, you've got to understand yield and revenue management and [environment, social and corporate governance]," he said.
McGlashan said hotel management companies like his have the responsibility to train their teams personally and professionally.
"The personal piece is what grows them, makes someone want to stay. [Workplace] culture isn't kumbaya love over everybody; it's a behavior," he said. "But nobody is taking the time to do that and that makes me really nervous."
Unfortunately, students coming out of university or looking to start their careers aren't thinking about the hotel business, McGlashan said.
"It's not sexy to anyone. But the truth is, it's the most exciting business, the most diverse that it's ever been, and the opportunities are endless. We're teaching that," he added.
Valor is currently struggling to fill property-level roles within food and beverage, housekeeping and other service staff. His company is now looking at opportunities to partner with culinary schools.
"Across the board, we've got gaps that we're always trying to fill," he added.
Company Growth Approach
Valor's portfolio growth strategy includes signing management contracts and deals for new-builds, joint ventures and portfolio buys.
Valor's most recent joint-venture partnership is with Dubai, United Arab Emirates-based ICD Hospitality and Leisure, a wholly owned subsidiary of Investment Corporation of Dubai.
Through this joint venture, Valor will scale up its operations in Middle East markets.
"We were in Asia but we pulled out during COVID. There's a few things that are starting to pop up in Australia and Asia again," McGlashan said.
In 2021, Valor formed a JV with Yamed Group to create Valor North & West Africa out of Casablanca, Morocco.
Also in 2021, the company announced an operating agreement with MCAP Global Finance (UK), which added 17 U.K.-based IHG Hotels and Resorts branded hotels to Valor's portfolio.
McGlashan said with inflationary pressures and supply chain constraints, "new-builds will definitely start to slow down, and I think the markets now are going to look at buying existing [properties], [then] renovate, reposition, rebrand, maybe even debrand at some point," he said.
McGlashan prefers quality of owner and project over quantity.
"I would say, though, ultimately over the next five years I'd love to see the U.S. [portfolio] triple in size. [In the] U.K., we're seeing some big growth and would like to double in size," he said. "South Africa and sub-Saharan Africa is where we're spending a lot of time and effort right now."
Deals Market
From McGlashan's experience, he feels "there's a ton of money" in the deals market.
He said it feels like a normal trading environment, unlike in 2010 when commercial mortgage-backed securities collapsed and assets were priced below market value.
"Nobody is in distress [in the U.S.], so pricing is at market or more," he said. "There are a fair amount of deals that are out there; we represent private equity, so we find the opportunities on market."
McGlashan said his team takes an aggressive underwriting approach on behalf of Valor's clients.