Staff Shortages Still Plague Hotels, May Push Rates higher

New York, NY, February 27, 2024-"Hotel owners have been on an epic hiring spree. Yet even after clawing back hundreds of thousands of jobs during the past two years, the industry is still light on staff and often struggling to adapt,” according to the Wall Street Journal.

“Daily housekeeping for all guests, room service and other amenities that were reduced or eliminated during the pandemic are still lacking at many properties.

“At the same time, hotels across the U.S. have held their daily room rates near all-time highs this winter, in part to offset the increase in wages to lure workers back. Hotels will collectively pay $123 billion in compensation this year, up more than 20% from 2019, according to the American Hotel & Lodging Association. 

“Some hotel owners now fret that a guest backlash could be building as smaller staffs can compromise the level of service and higher wages threaten to push the cost of travel even higher.

“‘If we’re expecting empathy from consumers, we’re not going to get it,’ said Bob Habeeb, chief executive officer of Maverick Hotels & Restaurants, which owns about two dozen hotels, mostly in Chicago and the Midwest.

Habeeb expects he will need to increase wages across his hotel portfolio by 10% this year-a cost that will be passed in part on to guests. ‘Consumers are going to have to pay more,’ he said. 

“The leisure-and-hospitality category has bolstered U.S. hiring growth for much of the past two years. The industry’s appetite for even more workers could help sustain growth in the broader hiring market, said Nancy Vanden Houten, a lead U.S. economist at Oxford Economics.”