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'Culture Absolutely Matters' in Addressing Labor Shortage, Hotel CEOs Say

Increasing Employee Happiness Boosts Retention, Recruitment
Carlos Flores (left), of Sonesta International, and Tony Sherman, of Terrapin Hospitality, speak at the 2022 Americas Lodging Investment Summit. (Bryan Wroten)
Carlos Flores (left), of Sonesta International, and Tony Sherman, of Terrapin Hospitality, speak at the 2022 Americas Lodging Investment Summit. (Bryan Wroten)
Hotel News Now
February 1, 2022 | 3:04 P.M.

LOS ANGELES — Every hotel company is having a hard time recruiting new employees, which executives said puts a spotlight on the importance of retaining existing employees in a period of historic turnover.

Speaking during the "Boardroom Outlook: People — Reworking the Work Equation" panel at the 2022 Americas Lodging Investment Summit, Crestline Hotels & Resorts President and CEO James Carroll said hotel operators such as his company are forced to prioritize company culture in a way that makes employees want to stick around.

"Most people want to do something that they feel good about and be in an environment that they feel good about," he said. "Culture absolutely matters. How you recognize people in the workplace, the kind of praise that you give to them, the feedback they get, whether they work in a environment where there's more teamwork is fostered and people are helping each other."

Carroll said those efforts to create a welcoming workplace will ultimately yield benefits beyond just keeping employees already at specific companies or in the hotel industry. He sees it as eventually being a selling point to work at hotels.

"We in the hospitality industry can do a lot better than your Amazon warehouse for culture, and make it a lot more rewarding and a lot more interactive and a lot more friendly place that people going to want to come back to and feel more valued than standing in a warehouse, or maybe you just kind of driving alone in your car all day with random strangers," he said.

Carlos Flores, president and CEO of Sonesta International, said his company experienced a hiring boom as it grew to roughly 1,200 locations, adding more than 7,000 employees over the past two years. He said culture is a part of the workplace whether or not executives and managers prioritize it.

"Whether you choose to acknowledge its importance or not, you're going to have a culture," he said. "It's just do you set an intention of what type of culture you want to have? It's important for any industry or any company, and it's only increasing in importance."

Flores said it's important to recognize that hotels "create value in the market through our people."

"You need to cultivate a culture that really brings out those elements and really allows for people to go that extra mile," he said.

He said those happy employees will be the best ambassadors, not just with your guests but also other potential employees.

"Thirty percent of the hires we made in 2021 came through an employee referral," he said. "That's all very important to us and is going to serve us well."

Flores added basic retention rate can't be the only measure of whether culture-building efforts are working.

"We're making sure that we're retaining them, but also are they happy?" he said. "Are they encouraged, and are we doing things like look at how we design jobs and the operations at hotels to lessen the burden? That's very core to what we've been focused on, a bit out of necessity."

Tony Sherman, CEO of Terrapin Hospitality, said the overall health of a company is a vital part of its culture, noting a wave of growth for his company has helped fuel employee enthusiasm.

"There's a sense of excitement that things are happening and that there is upward mobility," he said. "People are more excited to be working for a place where things are happening."

But Sherman said there is a constant challenge in translating culture from the C-suite to the line level. He said that requires sending a consistent message that employees are more than cogs.

"Culture [for Terrapin] starts with me, and I just try to instill in people to enjoy your life," he said. "Work is super important, but it's not the only thing."

Sherman also said that building a strong culture goes hand in hand with fairly compensating employees.

"People want to get paid," he said. "Culture is one thing, but getting $3 an hour more is another thing."

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