How companies are keeping their hotels staffed

The hotel industry is facing one of the toughest labor markets it’s ever seen. As of April 2022, the unemployment rate for the leisure and hospitality sector stood at 4.8 percent, according to the U.S. Bureau of Labor Statistics. By comparison, the overall unemployment rate for the U.S. was 3.6 percent over the same time period. Leisure and hospitality added 96,000 jobs in total in July, which was above expectations, but employment in leisure and hospitality was still below its February 2020 level by 1.2 million, or 7.1 percent.

While labor has always been one of the industry’s greatest challenges, the pandemic-induced layoffs and then the ensuing Great Resignation only exacerbated the problem. But sources say technology can open new opportunities amid the industry’s labor shortage.


Robert J. Habeeb


Maverick Hotels and Restaurants

Robert J. Habeeb, CEO, Maverick Hotels and Restaurants, identified the top three challenges the hotel industry is facing right now in regard to labor:

  • Wage escalation is at unprecedented levels across every industry, and hospitality is feeling pressure to adapt. “This has caused hotel leaders to reassess every aspect of their people plans,” he said. “Nonmonetary issues are just as important to our team members, and every aspect of the hotel working environment is under scrutiny right now.”
  • The worker shortage is affecting hotels at every level. “The job market is so frothy that people are willing to jump ship with little notice in search of new opportunities,” he said. “Hotels are managing to operate under these conditions today, just barely, but this is not sustainable for the long term.”
  • The issues that are driving the conversation in our society are also present in the workplace. “Keeping that top of mind is very important. Maintaining the morale and mental well-being of our workers is extremely important today, especially to avoid worker burnout,” he said.

While some experts claim that the Great Resignation is stabilizing, Habeeb said employers aren’t really seeing that trend yet. “Unfortunately, many skilled workers either left or were pushed out of hospitality as a result of the pandemic and we may never see them come back,” he said. “This aspect of the labor challenge is going to be more of a sticking point than many operators anticipate.”

Habeeb said the hotel industry needs to analyze its reaction to the COVID-19 crisis and extract lessons for future events.

“In hindsight, many of us would have responded differently in those early days and found ways to retain our most skilled workers. Of course, this is all easy to see with it in our rearview mirror, but it’s a lesson we can carry with us into the next challenge hospitality faces,” he said. “Additionally, few expected the pandemic to be so widespread, or for recovery to take so long, but these events do take place and we need to learn from them as best we can.”

A hotel with front steps and a yard in front of it
The Wheatleigh hotel in Lenox, Mass., has 19 guestrooms and is one of the smallest Leading Hotels of the World. (Life House)


Bryan Dunn

Managing director and head of growth

Life House

Life House has more than 50 hotels and more than 20 food-and-beverage outlets in high-barrier-to-entry drive-to leisure markets that: are labor constrained with limited specialized labor in-market; have experienced significant increases in housing costs; and have seen a massive boom in demand post-COVID. In order to address these factors, the company has taken the below measures, respectively, according to Bryan Dunn, managing director and head of growth:

  • A labor-light model thanks to technology: Through software-enabled automation, the company has eliminated the need to staff specialized back-office labor on-property. “Rather, we leveraged in-house built systems to automate complex functions from accounting and reporting to revenue management and digital marketing. As a result, we require fewer specialized [full-time employees] to be hired from the local market, and we can focus our recruitment efforts on high-impact guest-facing roles,” Dunn said.
  • A plan for employee housing: In some markets, Life House works with its capital partners to acquire and/or lease employee housing within close proximity to its hotels. It allows the company to qualify for J1 and H2B labor visa programs in seasonal markets. “It also provides us with a competitive advantage as it relates to recruiting and retaining hourly team members during high-season periods when housing is increasingly unaffordable,” Dunn said.
  • An investment in the HR team: Life House has continued to build out its corporate human resources team to focus exclusively on aiding GMs with recruiting for key on-property roles across the portfolio. “This centralized team, which leverages various software tools to maximize their impact, provides us with a major leg up versus smaller regional operators,” Dunn added.
Hotel exterior with a yard and trees
Skyline Lodge in Highlands, N.C., completed a full renovation in 2021. (Indigo Road Hospitality Group)


Scott Neslage

Director of lodging operations

Indigo Road Hospitality Group

Scott Neslage, director of lodging operations at Indigo Road Hospitality Group, said the company’s top three labor challenges are acquisition, retention and morale. “We are always looking for innovative ways to excel in those areas. Of course, the trickiest right now is retention,” he said. “[Because of] the combination of an on-demand culture and hot hiring climate, frontline workers are calling out more than ever or simply not reporting to work.”

The pressure to increase wages is a real challenge but wage increases aren’t a long-term solution, according to Neslage. “While it can entice employees to move from one firm to another, increasing pay doesn’t necessarily increase the number of workers in the industry and market,” he said. “We are doing our best to hold firm to our established pay ranges for new employees and focus on other ways to reward tenure and create a great environment in which to work. At some point, the economy will cycle and hotels who have significantly increased wages may find they can no longer sustain sufficient profits while paying workers at those rates.”

Neslage said technology offers a huge opportunity. “Having the right tools in place can significantly augment human productivity and improve customer experience. Poor technology in place can produce exactly the opposite,” he said. “None of us is in the ideal staffing situation this year, so how well are we working with the staff we have? Being thoughtful and investing in tech that can boost staff efficiency or enhance the guest journey can help make the best of the current thin labor market.”

Creativity is critical, according to Neslage. “I’ve learned to encourage more feedback and input on creatively solving our staffing shortage,” he said. “Our team has come up with some very innovative ideas that have helped us gain a leg up on our competition and hire. It’s also been of great benefit to involve the team at all levels of the organization in this approach, creating ownership and problem solving around staffing.”