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Availability, Cost of Labor Continues To Dominate Discussions About Hotel Operations

Owners Eager To Reshape Operating Model but Brands Want To Protect Service

Hotel companies continue to struggle recruiting and retaining talented employees to run their hotels. (Getty Images)
Hotel companies continue to struggle recruiting and retaining talented employees to run their hotels. (Getty Images)

If there's only one word that any talk about the state of the hotel industry revolves around right now, it's "labor."

How many workers a hotel can find, what they can do to keep them and how much they have to pay them are the consistent themes during a period where hoteliers are otherwise optimistic about the prospects of a recovery.

Hotel News Now has provided coverage of that topic from multiple angles, and here are some highlights of how the discussion of hotel industry operations and particularly labor have unfolded in recent months.

BWH Hotel Group's Larry Cuculic, left, and Remington Hotels' Sloan Dean speak at the 2022 Americas Lodging Investment Summit. (Sean McCracken)

Hotel executives highlighted the issues of labor and inflation at the Americas Lodging Investment Summit in January. When asked what the biggest issue the hotel industry faces, BWH Hotel Group President and CEO Larry Cuculic's response was unambiguous.

"Overwhelmingly the answer to that question is labor," he said, with other executives noting the problem is unlikely to go away any time soon.

At that same conference, leaders of hotel ownership groups highlighted the fact that they need to be thoughtful about what services they offer to counter the labor crunch, but brands are eager to maintain a pre-pandemic level of service.

Ashford Hospitality Trust President and CEO Rob Hays said his company has specifically pushed back on the operation of executive lounges.

"That's something brands were pushing hard from the loyalty side, and I think this has given us the ability to kind of rethink some of those amenity creep issues," he said.

In large part due to the growing costs of operating hotels, hotel management firms have been acquiring others or merging with similar companies at an increased pace. Some have said this phenomenon is a direct response to labor issues.

Remington Hotels President and CEO Sloan Dean said his company is in the market to buy another third-party management company specifically to bring costs down.

"I do think scale matters," he said. "We're 90 hotels, and you know, our procurement cost goes down if we continue to get a little bit bigger. Our ability to recruit, retain and have the best general managers out in the field is better if you have 150 hotels versus 100. I do think we're at the size where an M&A transaction is accretive."

Leisure destinations in the U.S. continue to be popular for travelers booking trips this spring and summer. (Getty Images)

Addressing concerns about labor and the overall operating model will be key as the industry's recovery ramps up. Many hoteliers are expecting an explosion of demand heading into the summer travel season.

And part of righting the ship includes finding ways to be an employer of choice for current and potential employees. Hotel companies have taken various approaches to accomplish that.

Some are ramping up training programs, which can improve both retention and open up new pools of talent.

“We don’t hire just for hospitality experience anymore,” Laura Presnol, vice president of talent and culture at Davidson Hospitality Group, said. “The theory of hiring friendly [people] and teaching the technical is more important than ever.”

Hilton, meanwhile, is expanding its education offerings, giving employees paths to a GED, English as a second language courses or even helping them earn credits towards associate's or bachelor's degrees.

All of this has added meaning as experts increasingly say young employees want to find some added meaning in their work beyond just a paycheck.

Young hotel workers in Europe say their experience with internships has been uneven, often localized but not very connected to the global hotel companies. (Getty Images)

And hotel executives are recognizing that "culture" is a concept they must take seriously.

"Most people want to do something that they feel good about and be in an environment that they feel good about," Crestline Hotels & Resorts President and CEO James Carroll 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."

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