Hotel operators believe the hotel industry is continuing to see an easing of the labor crisis that defined the early stages of the post-pandemic recovery, but there are still serious, long-term challenges to getting the best talent.
Sources noted staffing up in major markets with high population density is less difficult than seasonal or remote resorts — which continue to face pressures from both the availability and cost of labor.
"Our destination, leisure resort markets have always been a challenge," said Paul Eckert, executive vice president of operations for Davidson Hospitality Group.
He said his company has had to get creative to address those issues, looking at international student programs for seasonal workers and providing housing.
"We lean on work-and-travel programs in certain markets, and we've tried to come up with game plans by market and what segments work the best," he said, adding that 2025 is still going to be a "relatively challenging year" for labor overall.
Matt Arrants, principal at hotel asset management firm the Arrants Company, agreed with that assessment, noting staffing challenges are acute at the seasonal resorts he oversees across New England. He said those types of properties have to invest in seasonal housing and rely on programs such as H-2B and J-1 visas to thrive.
"One of my properties has invested heavily in seasonal housing, and that's been critical," he said. "It's helped a lot."
One thing hoteliers continue to see as the available pool of talent improves — at least marginally compared to the year prior — is those improvements are coming via quantity of applicants more than the quality of applicants.
"We're getting more applicant flow than we've received in the past, and it continues to get better in certain markets, while some markets still have a lack of depth in terms of overall employable people," said Chris Mellone, vice president of operations for Rochester, New York-based Essex Hotel Management. "It's seemingly rebounded to similar levels to before COVID in terms of just the overall applicant pool, but now I'll say that there's probably less qualified applicants than we were seeing then."
He said when hiring for positions, it's noticeably more difficult than in the past to hire someone with prior hotel experience, and he's noticed a decline in available young employees from college hospitality programs.
One positive for the hotel labor market heading into 2025 is sources largely said they're using less contract labor, which could mean some savings even as wages continue to creep up.
Bryan Tubaugh, founder and CEO of Arizona-based Aligned Hotel Management, said that his company's contract labor usage is mirroring the large-market, small-market challenges observed across the country.
"My Phoenix hotels are not having to use contract labor as much because we're starting to see a little bit more of that labor force coming back," he said. "At my southern Arizona hotels and tertiary markets, I almost have to use it because I can't get anybody else."
While availability concerns are lessened in major markets, several of the largest hotel markets across the country are seeing upward wage pressure due to strikes and union activity, sources said.
Arrants pointed to new union contracts recently signed in Boston, in particular, as likely to increase wages for employees across New England.
"Wage rates aren't going up as fast as they were [in the wake of the COVID-19 pandemic] or as dramatic as they were, at least for my properties, but I'm concerned about the implications of the new contract in Boston," he said. "That's going to put a lot of pressure on wage rates, not just in Boston. I don't think things are going to get any better."
Sources universally expressed the importance of visa programs — particularly H-2B visas to hire temporary seasonal foreign workers — to adequately staff their hotels and resorts, and were largely hopeful the incoming administration of President-elect Donald Trump would see the value in the programs.
Mellone said he hopes the need and importance of the programs is clear to politicians.
"I understand the premise of trying to keep Americans employed, but there's just not enough people to fill the roles in the U.S., particularly in the hospitality sector," he said.
With recruitment remaining more challenging than the pre-pandemic environment, many hotel companies have pivoted to putting a greater emphasis on retention, particularly of their best employees.
Toi Brown, senior vice president of human resources for Alpharetta, Georgia-based Hotel Equities, said keeping employees is often more intricate than just being willing to pay them the most.
"What we've found for the past two years [is] it has been about a flexible schedule," she said, noting the company tries to conduct surveys and take a data-driven approach to retention.
She said it also comes down to understanding the workforce and what kind of benefits would be most useful for them.
"With the workforce being more females and mothers, we've looked at things that they may need and getting it accessible" to them, she said.
She noted things such as making sure fertility treatments are available to families that may need them are more impactful than traditional benefit packages.
"It's really about personalizing those benefit offerings and pushing those things we've seen or been asked for frequently to the forefront," Brown said.
AHLA perspective
Matt Carrier, senior vice president of federal affairs, policy and research for the American Hotel & Lodging Association, foresees increases for both labor costs and availability heading into the new year, although the pool of potential employees will grow more slowly.
"Increased labor costs are largely being driven by an economy-wide shortage of workers," he said via email. "As of October, there were 7.7 million job openings in the United States and only 7.0 million unemployed people to fill these jobs, according to the Bureau of Labor Statistics.
"AHLA projected that hotels will pay a record high total of wages, salaries, and compensation in 2024 — $123.4 billion compared to $118.0 billion in 2023. We expect 2025 to be another record year for total hotel wages."
He said that dynamic continues to put pressure on profitability for hotels, which is something the lobbying group is prioritizing with the incoming administration.
"To provide hoteliers with relief, AHLA is fighting to get the Tax Cuts and Jobs Act extended," he said. "We’ll be working with Congress and the Trump Administration to ensure provisions that are important to hoteliers, such as pass-through deductions and like-kind exchanges, are maintained as part of that effort."
Carrier noted several regulatory hurdles hotels have faced in dealing with labor issues, including the Department of Labor's now-blocked effort to increase the overtime threshold, the Labor Department's change in rules for independent contractors, which the AHLA is suing to stop, the National Labor Relations Board's joint-employer standards — which was overturned in court — and a legislative push to expand the H-2B visa program.
"Thanks to a law that AHLA helped pass, the Department of Homeland Security in November made available another 64,716 visas," he said. "AHLA continues to support legislation that would replace the arbitrary annual cap of 66,000 available H-2B temporary visas with a new, needs-based system."