Even as wage growth and availability issues moderate somewhat across the hotel industry, labor continues to be a major issue, highlighted by the wave of strikes in Los Angeles and Las Vegas.
Here are some of the highlights from Hotel News Now's recent coverage of labor issues.
The Hospitality Asset Managers Association's most recent survey of members once again highlighted labor as the top issue hotel owners face, with wage increases ranking as their top concern and labor availability the third-highest choice.
HAMA President and CHMWarnick CEO and Managing Director Chad Sorensen said the bright side is while things are still difficult, they're getting at least marginally better.
"Labor availability has definitely gotten better," he said. "It's been a tale of two halves this year. While we're not out of the weeds yet on the labor front, it's starting to feel like we're starting to become more normalized."
Hoteliers seem increasingly focused on filling the remaining holes within their workforces with automated solutions.
“You have to supplement with either increased productivity, automation or immigration law,” Sloan Dean, CEO of Remington Hospitality, said during The Lodging Conference. “The solution is productivity sped up the last three to four years 8% to 10%. Everybody had huge productivity gains. How long is this sustainable? Well, automate — that’s actually part of the answer is automation, AI, etc. Job replacement: It’s coming, it’s now and it’s happening.”
Artificial intelligence and automation are increasingly becoming a factor within revenue management and content generation, in particular.
Speaking at the IDeaS Global Hotel & Client Summit, Shane O’Flaherty, global director of travel, transportation and hospitality at Microsoft, said it will play a key role in customer interactions as well.
“AI will automatically generate responses to customer inquiries and ... personalized content for websites. Classification, sentiment, entity extraction, summarization and email generation — the five stages of looking after a guest — will be automatically pinpointed to each of them,” he said.
Still, more traditional approaches to abating labor issues are still important. For example, Extended Stay America Chief Operating Officer Liz Uber said employee retention is a key part of her company's formula for success.
"Turnover is very costly, so we have spent a lot of time really focusing at ESA on making it a place that people want to work. What we've found out ... is people are looking for a purpose in why they come to work every day," she said at the 2023 Hotel Data Conference. "At ESA, our purpose is very clear. Our goal is to build a better life for them and their families. That not only goes for our associates but also for our guests."
The pool of available talent was one of the drivers for First Hospitality's recent acquisition of Hostmark Hospitality Group, according to First's President and CEO David Duncan.
Duncan said the ability to attract and retain talent will be a difference maker for hotel managers.
“That’s going to be really a key differentiator in hotel operating companies — who attracts the best talent [and] allows that talent to thrive in their positions supported by a culture that cares for those individuals,” he said. “That’s really one of our most primary objectives as we think about any strategic consideration.”
Staffing levels have been a pinch point for hotels' ability to raise rates, as the gulf between service levels and rate growth has grown into a key issue for guests.
“You look at cleanliness, safety, great service, positivity, strong loyalty program — they’re still looking for all of that. That is non-negotiable,” IHG Hotels & Resorts Chief Operating Officer of the Americas Jay Caiafa said at The Lodging Conference. “The traveler is becoming more unforgiving. You notice in those situations, I hear them complaining about rate combined with bad service or disappointing experience.”
As the strikes have highlighted, many industries face more of a push from organized labor than in recent history, and a new ruling from the National Labor Relations Board only exacerbates that.
Mike Carrouth, labor attorney and partner at Fisher Phillips, explained how interfering with efforts to unionize could actually make it much simpler for organizing efforts to succeed.
“It’s a very serious decision,” he said. “The landscape has changed. It is going to be much easier for an employer to end up with having to recognize a union than before.”