The Bureau of Labor Statistics continues to report employment and labor-related data that shows the hotel industry in the middle of unprecedented upheaval. The loss of jobs in the accommodations sector through furloughs and layoffs was widely reported in 2020. Now, over 18 months since the beginning of the pandemic, the industry is still struggling to attract workers back to their jobs. The problem is those jobs seem less attractive to some former associates than other available options.
The industry employed around 2.1 million people in early 2019, but the number plummeted to just over 1 million mid-2020 and has now recovered to 1.8 million. But this is still a 14% drop in workers in an environment where national occupancy has reached almost 58% through September.
The sharp decrease in the number of workers is different from the two past recessions. In the downturns post-9/11 and after 2008, the hotel industry suffered occupancy declines that were short-lived, and owners and operators did not reduce staff at a comparable level. The declines in the past were at a very different magnitude, only numbering in the tens of thousands of workers and never close to the 1 million observed last year.
The increases in demand in 2020 and 2021 were driven by sustained travel by American consumers and some limited business travelers. The expectation going forward is that group and transient demand will increase further in 2022, exacerbating the need for labor at all levels in hotels.
In addition, when compared to 2019, the number of women in the hotel industry has declined by 16%, a sharper decline than for men.
In the two prior downturns, owners and operators maintained the number of women in the industry. Today, they will need to find new and innovative ways to attract this part of the labor force, especially as other industries increase wages and nonmonetary benefits to appeal to women.
Part of what hospitality and hotel workers expect is a full schedule of hours each week. Unfortunately, the rebound in room demand has been skewed toward weekends, increasing the need for workers on Saturdays and Sundays. In contrast, the lack of business travelers midweek translates into less need for workers during those days, and on average, hotels are providing fewer hours for their workers than a decade ago. The number of hours worked compared to the prior downturn, post-2008, declined as well, but only marginally.
In addition to providing an attractive work environment and a full schedule, operators will need to revisit pay. The BLS data is showing a sharp increase in average wages over the past few quarters, implying that owners and managers are already reacting to competitive pressures from other industries and fellow hoteliers.
The direction of average hourly earnings seems clear. It remains to be seen if the increases in wages and salaries can attract workers who left the industry in 2020. Operators will have to work hard to welcome recent graduates and career starters, in addition to bringing seasoned employees back to their hotels.
The data paints a compelling picture: Room demand is returning. The question remains: Will hotel workers?