Hospitality will enjoy growth in 2019 but suffer from labor issues
Thursday, January 03, 2019
Occupancy, which has seen an increase to 66.2 percent in 2018, will receive a further boost from an anticipated 2.1 percent rise in demand. A combination of factors like capital spending, tax-law changes and improved wage growth have affected the industry for the better.
2019 will be the 10th consecutive year of growth. What’s not so great is the fact that, despite the robust figures, the industry will experience some major labor challenges. The tight labor market has put a lot of pressure on the owners who express alarm at the lack of labor available.
While the situation is worse in the suburbs than the cities, finding the right talent or retaining has become harder in all markets.
One would imagine that steady growth would result in significant employment figures. What it has done instead is increase the competition for business owners. There are now more jobs than there are people to fill them.
The industry is facing challenges in areas like gender equity, insurance requirements, and controversial political considerations, all of which have affected talent attraction. The strong growth and secure jobs market have made it a challenge to fill entry-level and even mid-level positions right now.
Hotel employees are taking advantage of this unemployment rate to demand changes like increased wages and benefits, job security and better healthcare. They want more job satisfaction since hotels have long been known to be underpaying employers. According to the American Hotel and Lodging Association, hotels owners are trying to change that tone and make paychecks more attractive to their employees.
There is a talent shortage for all levels, but is more so for lower-paying jobs like dishwashers, line cooks and wait staff. Crackdowns on illegal immigrants, many of whom have filled these positions for decades, are also affecting business.
There is now a concerted effort by the industry stalwarts to pave the way for a temporary visa program for low-skilled, essential workers who hail from the nation's immigrant workforce. They feel that if these temporary visas are granted, it will go a long way to addressing our hiring and retention issue.
According to the Bureau of Labor Statistics, there are many open jobs, but only 5.3 percent of those are filled. This is the highest level since 2000 and shows how hard it is for hospitality managers to find qualified employees.
There is increasing complexity in hiring and retention, which have added to the pressure. Leading hotels are adding a slew of ancillary positions that focus on improving employee commitment and retention.
Balancing the flexibility that the new generation of workers wants with the traditional needs of the industry is tricky. Human resources leaders who can create and implement flexible and employee-centric scheduling protocols are in demand.
Even in a relatively healthy marketplace, many hotel owners are worried about the inevitable downturn. There has been some discussion about a slowdown in demand, but it hasn’t happened yet.
The CBRE report does not forecast a hospitality industry recession through 2022 but does show that the current spate of growth will slow down after 2019. Risk factors like higher interest rates, credit-market problems, equity market corrections, and shrinkage in employment will affect the industry, but experts predict that the economic slowdown will be mild and short.
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