Labor Crisis Hits Hotel Industry Hard

2021-09-14 by JamesD

In July, some hotel owners and managers declared their view that the labor crisis that had been plaguing their industry would end once the federal government stopped paying unemployment checks to people. The federal government had declared its intention to cease boosting unemployment benefits by September at that point.

Now in September, the labor shortage in the restaurant and hotel industry has only intensified. Customer demand in the industry is rising post-pandemic but the companies cannot meet up with this demand due to the difficulty they currently face in hiring workers.

Long-term Labor Crisis Looms

The issue isn’t projected to be a temporary one either, as workers now expect more from their jobs than ever before as a result of the pandemic. Employers have to come up with new methods of finding and retaining workers in the new post-pandemic environment.

The issue the hoteliers face is increasing competition for labor. It’s so intense now that it has become the biggest challenge of many hotels, forcing some to shut down their bars and restaurants because they don’t have enough bartenders and waiters. A huge gap has thus been created between hotel guests and hotel staff.

What’s particularly worrying about the crisis is the result of reports that states that ended the disbursement of benefits from the federal government in June failed to record a tangible increase in hiring and job-seekers. This happened despite the higher number of people that clamored for help as they were in financial turmoil.

The reputation of the hotels and their executives wasn’t aided by the mass layoff in the industry in 2020, and they are now facing intense competition for labor from big companies that offer more competitive remuneration to labor. Another factor that is contributing to the hoteliers’ woes is the suspension of immigration in 2020 as a result of the pandemic and the restrictions on travel across the world.

Although the Biden government has made it a point to restore the immigration programs, there are huge backlogs to clear and the entire process is not aided by bureaucracy and embassy delays. The situation in Hawaii is largely the same; the number of hotel guests is lower than the number recorded in 2019 but still exceeds the number of hotel jobs that are significantly below 2019 levels.

The J-1 Visa Summer Work Travel Program is another reason identified for the labor crisis in the hotel and restaurant industry. As a result of this program, over a thousand workers crossed borders to visit the United States every summer, and they mostly took up jobs in the hotel industry. Some would even work double jobs; hotels during the day and restaurants at night.

This year, despite the restarting of the Summer Work Travel Program, only approximately 300 visiting workers have made their way to the US. This has created a sizable gap in the two industries the workers serve and because of this and a plethora of other causes; the hotels are far from bouncing back fully despite improved hotel occupancy.