Staffing shortages continue to plague hotels across the country, as employment in the hospitality industry remains down 1.4 million jobs from February 2020, according to the latest jobs report from the U.S. Labor of Bureau Statistics. As occupancy levels pick up and hotels prepare for record-breaking quarters in 2022, industry leaders speaking at NYU's 43rd Annual International Hospitality Investment Conference urged hoteliers to get creative with incentivizing employees and make sure they are attracting a sufficient and diverse workforce.
"We have to look at things differently," said U.S. Travel Association president and CEO Roger Dow, during a panel session at the event, held Nov. 7-9 at the New York Marriott Marquis. Dow noted that the old solutions of wage increases and better benefits won't be enough to solve the ongoing labor shortage issue. Instead, he advised hoteliers to lean into a more flexible workforce and rethink their entire staffing model.
"We've got to take a whole fresh look at how we approach labor flexibility," said Dow. "Can there be a gig workforce? Can someone work two days a week? Can someone work at a Marriott on a Tuesday and at a Hilton on Wednesday? We've got to really rethink this."
Sloan Dean, president and CEO of Remington Hotels, agreed and acknowledged that the hotelier's workforce is down 10 percent, with about 600 open jobs. According to Dean, "every hotel in every market" has been affected and wage increases alone have not been enough to solve the issue. In fact, Remington Hotels has already raised its hourly wages 20.8 percent compared to 2019.
To fill empty positions, Remington Hotels is working to provide childcare solutions so that parents who have had to care for children in remote learning environments over the past 18 months can reenter the workforce. Other incentives include free counseling and courses that teach English as a business language to help those who are not native English speakers and would like to make a career in the hospitality industry.
"I think the labor problem is here to stay for the next couple of years and it's going to take a wide swath of solutions to solve it," said Dean. He shared that Remington is also looking at moving from weekly pay to a daily pay model in an effort to tap into the gig economy and compete with companies such as Uber and Lyft.
Meanwhile, Aimbridge Hospitality is already offering its employees the option to receive daily pay across all of its hotels in North America. According to president and CEO Michael Deitemeyer, about 7,000 people currently take advantage of the service, which allows them to receive 50 percent of their pay on a daily basis. In addition, Aimbridge Hospitality is testing technology that would allow them to see which hours an employee is available and find shifts that accommodate their schedule — all in an effort to address widespread staffing issues.
As hoteliers rebuild their workforces, speakers stressed the importance of attracting and retaining employees from diverse backgrounds. During a day two panel, Nicholas Graf, associate dean and chair of the Jonathan M. Tisch Center for Hospitality Management program at New York University, shared statistics highlighting the lack of diversity at the highest levels of the hospitality industry.
According to Graf, Black employees make up roughly 18 percent of the hospitality industry, but hold less than one percent of the CEO-level jobs. In addition, research from the management consulting firm Korn Ferry shows that diversity within the hospitality industry is far behind that of other sectors. While Black leaders hold 5 percent of executive positions across all industries and 4 percent of executive positions at S&P 500 companies, only 1.6 percent of executive roles within the hospitality industry are held by Black leaders.
To address this issue, Graf announced the creation of two new scholarships that will provide full aid to two graduates of Howard University and/or other Historically Black Colleges that want to pursue a master's degree at NYU's Jonathan M. Tisch Center of Hospitality. The scholarships will build on the momentum of the new Marriott-Sorenson Center for Hospitality Leadership at Howard University, which was created in honor of late Marriott president and CEO Arne Sorenson and aims to build a robust pipeline of young Black hoteliers who will become future leaders of the industry.
"We have about 10 Howard students here today, and my own ambition is that some five to seven of them are going to be CEOs of your companies some 20 years from now. That's why they're here," said Howard University president Wayne A. I. Frederick. "I also want two or three of them to start their own hotel chains or their own aspect of the hospitality industry. That second point is extremely important because the access to capital and the access to resources is not equivalent — we know that. So, we have to create a more equitable system by which these young people can access that capital and that opportunity."
In addition to partnering with Historically Black Colleges to bring in diverse applicants at the early-career levels, the speakers noted the importance of training and promoting people of color who are already working in the hospitality industry. Having diverse representation at the highest rungs of the industry and communicating that there is a clear path for others to follow will be critical to attracting and retaining the next generation of the workforce, said Andy Ingraham, president, founder and CEO of the National Association of Black Hotel Owners.
"We've got to do a better job of selling this industry to more diverse participants," said Ingraham, noting that the push for diversity must be a movement, not a moment. "My mother insisted that I not go into the hotel industry. Why? Because she didn't see anybody who looked like me in those upward positions. We've got to convince people — and young people particularly — that this is a great industry to start in and you can go all the way to the top."