What started as a pain point has now become a chronic, recurring ailment for hotel operators. Yes, it’s labor—or, more accurately, the lack thereof.
Unfortunately, this problem has been amplified, with the pool of reliable workers shrinking even as wages and hotel demand continue to increase. The Bureau of Labor Statistics reports that average hourly earnings for hotels rose from $24.22 in February 2025 to $25.20 in January 2026. At the same time, 65 percent of respondents in AHLA’s March 2026 survey cited labor costs as one of their biggest challenges and largest financial pressures.
“What we are seeing in the data is continued wage pressure combined with ongoing staffing challenges,” said Andrew Arthurs, COO of hospitality software company Actabl. “That dynamic is still the biggest driver of cost increases across hotel operations.”
Compounding the problem is uneven productivity. Wage cost per occupied room increased 12.8 percent year over year, while hours per occupied room rose between 4 percent and 5 percent, per Actabl’s data.
“This indicates that hotels are still using more labor while paying more for it,” Arthurs said. “That is the core tension operators are managing right now.”
Labor Costs Rise, Operators Adjust
These tensions have often forced a hard stop to the old ways of approaching staffing and labor management. Rather than cutting costs outright, changes are happening behind the scenes, mostly in how labor is measured, scheduled and deployed.
“There is a much more focused effort on top-line revenue, specifically ADR and channel mix, to help offset the added wage pressure,” said Ben Howell, senior vice president of operations at Remington Hospitality. “We are at a point now where we run zero-based staffing models daily and need added topline to drive the profit our owners expect.”
That shift is also changing how operators review labor performance on a day-to-day basis.
“High-level metrics like total labor cost are no longer enough on their own,” Arthurs said.
Instead, he believes operators should use HPOR and CPOR as baseline indicators when reevaluating how labor is deployed across the property.
“These give a much clearer view of where staffing patterns are changing and where adjustments are needed,” Arthurs added. “What’s important to understand is that the leading indicators are role-level productivity metrics.”
Getting granular also changes how labor is regularly overseen. The old approach often meant managing labor based on month-end reporting, but there’s a glaring problem with that.
“This leaves operators behind, as the opportunity to adjust has already passed,” Arthurs said. “One of the biggest mistakes is relying too heavily on lagging data.”
Instead, operators are moving to more frequent labor reviews—ideally daily—and adjusting staffing as demand changes. It’s a strategy Remington employs. One Howell believes has paid off.
“Our hotels are laser focused on things we can control daily and weekly, such as scheduling and management of over-time,” he said. “We are making adjustments in real time to ensure there isn’t unexpected cost creep that isn’t being forecasted.”
Smarter—Not Reduced—Staffing
Controlling the controllables is one way to remain efficient and avoid unnecessary cost creep, but it doesn’t cure the chronic labor ailment. Many hotel roles still remain difficult to fill or keep filled.
“Housekeeping is the most challenging department, and the issues have only been amplified with the added strain due to immigration concerns,” Howell said, noting the company often relies on third-party contract labor for these hard-to-fill roles.
This is a strategy that’s certainly been trending, according to Jeremy Friedman, director of strategic partnerships, hospitality, at flexible staffing solution Instawork.
“We’re seeing a meaningful increase in demand from hotels on the Instawork platform, but more importantly, the type of demand has shifted,” he said.
Hotel demand on Instawork has grown by more than 50 percent over the past 12 months. This has largely been driven by increased demand across culinary, food and beverage, maintenance and event-driven roles. For many operators, these adjustments are less about reducing labor and more about reshaping how it’s used.
“These aren’t roles where someone can come in and figure it out over time on the job,” Friedman continued. “They need to be productive right away, and this demand is often tied to events, group business and peak periods.”
The biggest issue he sees for hotel staffing right now is twofold: timing and reliability.
“Hotels need people when the business shows up, not two weeks later,” Friedman said.
From his standpoint, the solution to these problems tends to be a blended model where hotels still use flexible labor for true peak needs, banquets, stewarding and events, but they also build a consistent layer of Instawork workers that they bring back regularly to supplement.
“That roster becomes an extension of their team,” he added.
This model can also give operators more control over both cost and performance.
“When you have workers coming back to the same property, they understand the operation, the standards, the flow of the building,” Friedman said. “That cuts down on training, improves productivity and gives operators more confidence in who’s walking through the door.”
Flexible Labor, Flexible Approach
Another way to reduce training, increase productivity and give operators more confidence (sometimes) is to let a robot do it.
“AI is the wave of the future here,” Howell said.
Remington is beta testing new AI tools that Howell said will help the company better anticipate challenges and schedule more effectively by tying past trends to real-time forecasts.
The company is also relieving the strain from one of its biggest pain points—housekeeping—by providing perks like brand rewards points or small credits to on-site food and beverage or retail outlets to guests who decline the service.
“It’s all about communication with this and turning it into a positive with the guest at the time of arrival versus the perception that we may lack the staffing to clean the room,” Howell said. “Generally speaking, the perks the guests are given for this are cheaper than the wages to clean the room.”
Cross-utilization is another strategy that can save some time and money. A flexible worker might, for example, support stewarding one shift, then move into prep or line support for the next. That flexibility really matters, Friedman said, when the operation is moving quickly.
“This helps control costs over-time and reduces the pressure on full-time teams,” he said. “Operators who lean into this model are often able to meaningfully reduce over-time reliance while still maintaining coverage during peak periods.”
From a service standpoint, Friedman doesn’t believe a hotel is sacrificing quality simply to obtain coverage. Rather, they’re working with people who have already proven they can perform.
“At the end of the day, it gives operators a way to stay ahead of the business instead of reacting to it,” he added.
Of course, staying nimble and agile by relying on the data is always a solid strategy for Arthurs. In addition to using metrics like HPOR and CPOR to more precisely deploy labor, he believes the most effective operators are focused on improving forecast accuracy, more frequent decision-making and stronger alignment across teams.
“Forecast accuracy is foundational,” he said. “If the forecast is off, labor decisions will be off as well.”
From there, the day-to-day decisions need to take place. These can’t happen, however, if teams aren’t in sync with one another.
“We see strong results when teams are aligned through regular communication, such as daily stand-ups, in which they review demand changes, staffing levels and operational priorities,” Arthurs said.
When that happens, he believes results are easy to see. He points to resorts as an example.
“Over the full year, they reduced labor costs per occupied room despite wage pressure, indicating stronger scheduling discipline and better alignment with demand,” Arthurs added.
More broadly, he noted successful operators are the ones who look closely at role-level productivity and adjust earlier, before inefficiencies show up in financial results.
The hard truth is labor costs may not be coming down anytime soon. The solution certainly isn’t to hope demand drops to a level where it’s manageable for the current staffing situations. Instead, it may be to reframe the problem. To perhaps view and manage labor not as a fixed expense, but as something fluid that has to align with demand and adjust to the data at hand.
“Treat labor as something that needs to be actively managed every day, not just reviewed periodically,” Arthurs said. “Track productivity at the role level, closely monitor forecast accuracy and hold managers accountable for making timely adjustments. And ensure that revenue, operations and department leaders are working from the same data, which helps create more consistent and effective decision-making.”
That might be a mouthful, but it might also be the winning combination.
This article was originally published in the June/July edition of Hotel Management magazine. Subscribe here.