At Hunter, owners and operators consider labor crisis

ATLANTA — The second day of the 32nd Hunter Hotel Investment Conference at the Atlanta Marriott Marquis brought CEOs and presidents of several operating and investment companies together to discuss how they had handled the downturn of the last year and what they had in store. Perhaps not surprisingly, the labor shortage dominated the conversation.

Labor Woes

“The biggest issue we have across our portfolio is having to, in certain markets, shut off inventory because we have no ability to clean the rooms, to turn the rooms,” said Michael Deitemeyer, president and CEO of Aimbridge Hospitality, as the "View from the Top" panel kicked off.  

Related: Hunter Conference focuses on moving forward

Rob Palleschi, CEO of G6 Hospitality, agreed, noting that rapid reopenings have spurred growing demand for workers week over week. “As of right now, this minute, with the 135 properties that we currently own and operate, we need 547 team members,” he said. “Last week, at the same time, we needed 520. The number the week before that was 480. And so the number keeps going up and we're just looking at it every day—where do we deploy team members?” 

Aimbridge has set up recruitment process outsourcing partners in several key markets where the company has decent scale. This, Deitemeyer acknowledged, is a short-term fix to fill the most important gaps. For the longer term, the company is considering different solutions that could help give both the hoteliers and the workers what they need. “We're in a handful of markets with gig pay, so you can get paid at the end of the shift every day,” he said. “That is something that we think will appeal to a certain demographic.” Another solution would work in markets where the company has multiple hotels under certain brands. Management companies could assign workers who are already familiar with a brand’s system and standards to different hotels within that market on different days, making sure each property has the right number of staff when demand is greatest. Similarly, one engineer could support multiple hotels across different product categories in a market. 

G6, meanwhile, is using retention packages and bonuses to attract and motivate workers. Rockbridge CEO Jim Merkel praised the wide range of initiatives hotel companies are taking to find solutions to the issue. “What we have to do is think a little bit differently to solve problems,” he said.


Palleschi noted the recent alliance of the American Hotel & Lodging Association and industry union Unite Here as a good sign for hospitality partnerships. “That's a huge step,” he said of the two associations joining forces. “I think we can all come up with creative solutions and stay aligned and stay united.” While some hotels try to entice team members away from other properties, Palleschi discouraged the practice. “It's OK to steal [labor] from the restaurants, it's OK to steal from Amazon, but we can't steal from each other,” he said. “We've just got to help support each other.”  

Solving the labor shortage will require a full change of the hospitality business model, said Mark Laport, president and CEO of Concord Hospitality Enterprises Co. “A lot of us that serve on various boards and advisory boards of various brands are yelling and screaming that we must do that,” he said. “I can't tell you how important it is. Now is the time to do it.”

The pandemic, the travel downturn and the economic crisis have created a perfect storm to drive change, Laport argued, and those changes can help improve hospitality labor statistics. “We're already doing things—in some cases—that some of our friends in the brands would push back [against], but they don't pay our bills,” he said. Alliances like AHLA and Unite Here can set a precedent for a “tidal force of collective efforts” that can drive the change the industry needs. 

While spring and summer likely will be tough, Palleschi added, he hoped that hotels will be ready for business travel by September—“when the more discriminating customers [with] higher expectations, those willing to pay higher rates, we'll be able to service them.”