Hotels Are Offering Bigger Paychecks to Solve Shortages. Is It Working?

Hoteliers are raising wages and offering workers more scheduling flexibility to help remedy significant staffing shortages, according to a new survey by the American Hotel and Lodging Association (AHLA).

The Washington, D.C.-based trade group surveyed 408 hotel employers across the U.S. in January.

More than two-thirds (67 percent) of survey respondents said they are experiencing a staffing shortage, and 12 percent said they are “severely understaffed,” meaning the shortage is affecting their ability to operate. The most critical staffing need is in housekeeping, with 48 percent ranking it as their top hiring need, according to the survey.

The situation has improved from previous months, however. In May 2023, 82 percent of survey respondents indicated they were experiencing a staffing shortage.

Respondents to the latest survey are attempting to fill an average of nine positions per property, unchanged from May 2023 but higher than the average of seven vacancies per property in January 2023. There are more than 70,000 hotel jobs currently open across the country, according to the AHLA.

“It’s not surprising to hear that hoteliers are facing challenges in attracting and retaining workers in today’s labor market,” said Cory Stahle, an economist at the Indeed Hiring Lab. “Despite all the recent chatter around tech layoffs, Indeed data shows that many in-person jobs remain in high demand. Cleaning and sanitation jobs, which include housekeeping roles, are nearly 20 percent above their pre-pandemic level. That’s less than the demand seen last spring but still represents labor market tightness and resilient demand for those workers.”

The AHLA survey also found that 82 percent of respondents have increased wages over the last six months. In addition, 59 percent are offering greater flexibility with hours, and 33 percent are expanding benefits. As of December 2023, national average hotel wages were at an all-time high of $23.91 per hour, according to an AHLA analysis of data from the U.S. Bureau of Labor Statistics.

“Average pay tends to creep up a bit every year as workers get raises, but what we saw a year or two ago was a surge in wage growth—especially in sectors with historically low pay,” Stahle said. “While those big wage gains have calmed, sectors like cleaning and sanitation are still recording higher-than-average wage gains. Posted wages for all jobs grew at a pace of 3.6 percent in January, while cleaning and sanitation roles came in at 4.2 percent.”

Chip Rogers, who until recently was president and CEO of the AHLA, said that nationwide labor shortages are preventing hoteliers from filling tens of thousands of jobs and that Congress has a role to play in helping reduce those shortages.

“We urge lawmakers to address this urgent issue by creating an H-2B returning worker exemption, passing the Asylum Seeker Work Authorization Act, and passing the H-2 Improvements to Relieve Employers Act,” he said.

SHRM supports these legislative efforts and others, as part of its 2024 Workplace Immigration Campaign.

Exempting returning H-2B workers from the H-2B program cap of 66,000 visas per year would help hoteliers alleviate critical staffing shortfalls, especially at seasonal small-business hotels.

The Asylum Seeker Work Authorization Act would allow asylum-seekers to work as soon as 30 days after applying for asylum, while the H-2 Improvements to Relieve Employers Act would expand the H-2 labor certification period to three years and permanently authorize the waiver of in-person interviews for returning workers.