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Labor Double-Whammy for Hotels Affects Planners, Too

Even as they pay front-line employees the highest average hourly rate ever, more than two-thirds of properties nationwide still have notable staffing shortages.

December 2023 saw the highest average hourly rate ever for front-line employees at hotels across the country: $23.91, according to the U.S. Bureau of Labor Statistics. Even so, 67 percent of more than 400 hotel managers who responded to the latest survey conducted by the American Hotel and Lodging Association say they still face a staffing shortage.

More than four out of five hotels have increased wages within the last six months alone, as leisure and business travel has been robust, according to the AHLA survey. Further, 59 percent are allowing greater flexibility in employees’ work schedules and 33 percent have expanded employee benefits.

However, because present hotel demand requires more employees than the demand seen in May 2023, when the previous AHLA survey was conducted, properties have an average of nine positions to fill right now versus seven positions back then.

Jan Freitag, national director of hospitality for hotel-industry analyst CoStar, said in this article from SmartBrief that although further growth is expected in hotels’ revenue per available room in 2024 and 2025, hotels are worried about increased expenses. “Labor costs are a significant driver of overall expenses. While the labor bureau’s data shows a return to pre-pandemic employment numbers, the hotel industry has grown its room count by more than three percent since 2020 and so it remains understaffed.” Housekeeping and banquet/event services are the areas where staffing is most challenging, according to responding property managers.

As meeting planners send out requests for proposal for upcoming meetings and communicate with hotels that respond, it seems likely that their property counterparts will not be amenable to negotiating on price. However, planners could ask for service guarantees to ensure an acceptable quality of experience at a host property.

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