Living in a World of Labor Shortages

By Timothy R. Wiersma, CRME, Founder and Principal, Revenue Generation LLC, and a member of HSMAI’s Revenue Optimization Advisory Board

At this point, engaging with the recovery is like playing poker: You don’t know what cards you’re going to be dealt next. The delta variant is just the latest in a year and a half of unpredictable hands — but even before the pandemic, the hospitality industry was facing serious problems such as a chronic labor shortage. By forcing layoffs and furloughs that have pushed hospitality professionals into other industries, COVID has only exacerbated things.

Add to that the challenges of managing a post-COVID workforce — from attracting the next generation of talent with adequate wages, benefits, and telework options, to enforcing vaccine mandates and other health and safety measures — and you have a dilemma that is going to be with us for the foreseeable future. During a recent call for HSMAI’s Revenue Optimization Advisory Board (ROAB), I moderated a discussion during which ROAB members discussed how their companies are addressing labor shortages, not just today but in the years ahead. Here are key insights they offered during our conversation:

The end of amenities? “Addressing a labor shortage means cutting amenities. Some of the amenities, properties are not opening, and they’re also revisiting breakfast, which is tough because in a mid-scale and a limited-service property that is what travelers expect. So that’s one thing. And then also, housekeeping. I don’t see the labor shortage easing up in the fall, so I don’t believe we’ll see amenities like that coming back anytime in the near future.”

Sign-on bonuses and other incentives: “Using Las Vegas as one example, I’ve heard about things like $1,000 sign-on bonuses for housekeeping. Companies are getting pretty creative with trying to attract new people or even get back those team members that may have left during the pandemic with some major incentives that are fairly unprecedented.”

Wages and daily pay: “We have tried a number of different things like offering daycare and improved cafeteria lunches and different stipends and sign-on and retention bonuses, and we haven’t seen traction with much of anything other than wage increases — and trying to be really proactive about that before you’re at a point where you’re pulling rooms offline or closing outlets because you can’t service them. The other thing that’s been impactful has been moving to daily pay — instead of paying out every two weeks, at the hotel level you’re paying out each day. I know that there have been tests from various brands in a number of markets where they’re looking at kind of a gig work setup, where if you’re a housekeeper, you can opt in to work on a certain day and they might allocate you to whatever hotel in that market needs the help, and then you go work and you get paid that day.”

Immigration restrictions: “One of the things that I don’t hear enough talk about is the cumulative impact of restrictions on natural legal immigration — for seasonal markets, the availability of the HB1 and L1 visas. If we get those surges in labor supply seasonally that we’ve gotten used to or that we need in some destinations, that might alleviate, especially in some resort markets. There are a lot of international markets out there that are flush with highly skilled, very qualified workers that maybe had visas before and don’t have them now.”

Work from home: “We’re looking at flexible options and hybrid options. We’ve had to offer some full-time work at home just to get revenue talent, which has been incredibly hard to find, especially for our resort destinations. We’re seeing that as more of a normal thing in the future is okay: You can work remote, and we’ll fly you out to the resorts every so often.”

Rebuilding faith in hospitality: “The pandemic has created an environment where confidence is something that needs to be rebuilt for people. There are a lot of people who say, ‘Boy, is this the right industry to be in?’ In our area of revenue optimization and data, quite frankly, every company now is doing this kind of work in every vertical, and so people are looking for areas with more stability. I think we have to do a lot more to communicate with people a level of confidence in the future, and that this is a good industry to be in.”

Realistic goals: “We also need to think about our own people this year, and how we bonus them and incent them and measure them, because with people shutting down inventory, they can’t necessarily win on the STAR Report or hit their budgets. So, what are those new measurements, and how do we make sure that we’re incenting them and rewarding them and recognizing their successes if it’s not through the numbers and the data?”

Recruiting students: “I wonder if the message that comes to hospitality students from all of our organizations has to be finetuned a little bit. If you’re looking for people in revenue management but you’re sending out talent scouts that are very focused in operations, revenue management gets very little voice. As heads of revenue strategy, are we figuring out what is our voice when we go to all of these places to recruit?”

More positive messaging: “I was going to comment on messaging as well, but externally. If you’re thinking about entering the industry or you’re making a change, or you’re just an adult looking for a position and you think hotels could be good because you could grow — we have a PR problem, right? The news is still about how much hotels are struggling, so when people are evaluating a job at XYZ or a job at the front desk, they’re probably going to go for XYZ, just because it seems maybe more stable and not like an industry on the verge of collapse. Figuring out a way to reframe that message could be very important from a recruiting perspective.”

Categories: Revenue Management, Talent and Leadership Development
Insight Type: Articles