US hotel industry wage growth outpaces nation
US hotel industry wage growth outpaces nation
10 DECEMBER 2018 9:15 AM

The availability and cost of labor have been cited by many in the U.S. hotel industry as a top concern, which is justified by recent data and research from the Bureau of Labor Statistics and WageWatch.

REPORT FROM THE U.S.—With unemployment shrinking to 3.7%, as recently reported by the U.S. Bureau of Labor Statistics, the labor market is the tightest it has been in 50 years.

New job openings continue to exceed the numbers reported as unemployed, which puts finding and retaining talent front and center for the hotel industry as hotels compete for new employees with each other and with other industries such as healthcare, food service and retail.

The forecast by STR, parent company of Hotel News Now, of new hotel openings at or around 2% a year through 2019 means hotel room count will increase by an estimated 150,000 to 200,000 rooms by the end of next year. In terms of housekeepers alone, this equates to another 10,000 to 13,500 new employees just to clean the rooms. Overall, the hotel industry has reached a new employment high every month since the end of the Great Recession and the recovery of the hotel industry beginning in 2010.

The tight labor market also has driven up wages across the country. Salaries for jobs ranging from line positions at front desks and restaurants to GMs have increased well above the general wage increases experienced across the U.S. Average annual wage increases in the hotel industry began to exceed 3% a year in 2014 and in 2018 surpassed 4%, compared to a national average wage increase of 1.9% in 2014 and 2.8% in 2018, according to data from the Bureau of Labor and Statistics and WageWatch.

Even with wage increases in the hotel industry substantially higher than those in the private sector, human resources departments at hotel companies are finding it difficult to obtain and retain new employees. Some of the issues that are repeatedly reported across the country include:

  • difficulty hiring quality candidates who can pass a background check and a drug screening;
  • new employees have a difficult time adhering to company attendance policies;
  • high expectations by new employees of accommodations to be made by employers;
  • a trend of applicants not showing up for job interviews; and
  • new millennial hires seem to be continually looking for their next gig.

Looking ahead to 2019, wages in the hotel industry could see increases of 4% to 4.5% across the country, which could have a significant impact on bottom lines.

Randall Pullen is President and CEO of WageWatch, Inc., which he founded in 1999 to design and implement Web-based wage and benefit surveys. Mr. Pullen‘s work experience includes over 30 years of software development and consulting to the hotel industry. Mr. Pullen is a certified public accountant and a member of the AICPA. He earned a Bachelor’s Degree in mathematics and an MBA from Arizona State University. He serves on the boards of a number of companies and associations, and is currently the Treasurer of the Arizona Housing Finance Authority.

The assertions expressed in this article do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please feel free to comment or contact an editor with any questions or concerns.

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