Because it can be a challenge to retain staff at remote destination resorts, some owners are offering on-site room and board as an incentive. But that approach has some drawbacks.
Staffing is a major concern for nearly every hotel around the world, but where this challenge becomes particularly prickly is when you’re the operator of a resort that’s in a remote part of the globe where labor is sparse and commuting is compulsory. Oftentimes, to keep your employees, you need to offer on-site room and board as part of the employment package.
This approach can have several drawbacks, including the extra expense involved in subsidizing all these additional personnel living on property. In speaking with Bill Rheaume, director of management services at Inntegrated Hospitality Management, he offered two resorts that together offer a holistic view of the advantages and disadvantages of the different approaches to the staffing challenges that most rural properties are facing.
As background, IHM is a Canadian hospitality consulting and management company offering a full range of integrated management services for hotel, resort and food-and-beverage operations, specializing in operations efficiency, market repositioning and cash flow maximization with numerous client properties across country. The two hotels highlighted for this case study are Baker Creek Mountain Resort, situated just outside Lake Louise, Alberta, within the iconic Rocky Mountains, and Halcyon Hot Springs resort, nestled away in the interior of British Columbia. The closest major, populated area is more than two hours away by car.
The 35-room Baker Creek resort, near the renowned ski village of Banff and about a two-hour drive from Calgary, is mandated by the government to supply some form of employee housing because of its location within a national park. Given this directive, all team members live onsite except for one commuting senior manager. Staff have the option of four separate, multi-purpose buildings with four additional apartment units devoted solely to the management level. Most line employees typically share a room while supervisors are assigned their own rooms.
The leading advantage of this setup is that all team members are always close by, thus affording them an unsurpassed ease of going to and from work. With the rent subsidized, staff also have the ability to prepare their own meals instead of depending on a cafeteria or takeout. And not to mention, employees have immediate access to a plethora of hiking trails, winter sports and some of the most spectacular scenery in the world.
While these pros are crystal clear, some of the drawbacks can become quite demoralizing over the long run. First and foremost is cabin fever. The remote location means that employees have limited external social interactions, and even less “breathing room” away from their fellow teammates. This can be particularly burdensome for line staff, as they don’t necessarily get to choose their roommates, which could cause for potential personal conflicts to ensue. And just because their accommodations are bankrolled by the hotel does not mean they can afford a car, and they are often at the mercy of friends or the resort’s shuttle to use the national park’s amenities and services. All work and no play makes Jack a dull boy, am I right?
Owners of the 45-room Halcyon Hot Spring resort, which is located in an even more remote locale in British Columbia’s West Kootenay region, have taken a different approach. A variety of employee housing exists onsite, including some rooms above the hotel’s restaurant in the main lodge. There’s also a series of RVs and rooms in a modular building located in a designated area on the grounds. These on-property accommodations account for 40% of staff while the remainder live in Nakusp—the nearest town, about 30 minutes away. Recently, the resort owners made the decision to expand employee housing in Nakusp, rather than increasing on-site accommodation, acquiring a residence and land for a new building. They happily provide a daily shuttle service for all staff living there.
Just like with Baker Creek, the on-site employee housing has all the same benefits and shortcomings. However, those living in off-site housing are able to experience a greater social dynamic being embedded in a community, giving them room for more frequent interactions with friends and family and a small buffer away from their work. The two downsides to this residence in Nakusp are both related to cost in terms of subsidizing the higher rental prices and the hour-roundtrip shuttle service.
While Baker Creek and Halcyon demonstrate two slightly different approaches, there are quite a few other variants for you to consider, but it all depends on your resort’s unique situation. To make a decision one way or the other, Rheaume emphasizes the following key questions:
- Does the labor environment or talent availability necessitate the creation of employee housing?
- What legal requirements for housing are mandated in your territory?
- What type of employee are you trying to attract? Are you looking for an attribute that may limit your options like mature staff, managers, experienced tradespersons, couples or families?
- Is the resort within the boundaries of a town or village? Moreover, is the resort within walking distance of essential services or amenities?
- Does the property have enough space or land to accommodate employee housing away or out of immediate eyeline of guests?
- What is the cost of building or repurposing an existing building onsite versus the construction or acquisition of off-site housing? For the latter, have you considered future real estate value?
- What are your ancillary costs associated with any form of employee housing including maintenance, transportation and taxation?
While there’s certainly a lot to consider here, what this analysis shows is that you must give some more thought to how certain types of housing will influence the long-term morale of your team members and how this will affect service delivery or staff retention rates. If you’re able to carefully answer the above questions, though, you will undoubtedly reach the best possible solution to your housing problems.
One of the world’s most published writers in hospitality, Larry Mogelonsky is the principal of Hotel Mogel Consulting Limited, a Toronto-based consulting practice. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also on several boards for companies focused on hotel technology. His work includes four books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), and “The Llama is Inn” (2017). You can reach Larry at firstname.lastname@example.org to discuss hotel business challenges or to book speaking engagements.
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