Help Wanted: Worker Shortage Challenges Events Industry

Author: David McMillin       

help wanted

The Bureau of Labor Statistics in June reported 1.6 million job openings in the leisure and hospitality industry.

With vaccine numbers rising and COVID-19 cases falling in most parts of the world, face masks are coming off, and conventions and trade shows are beginning to return around the U.S. However, in many cases, there simply isn’t enough staff to adequately support an influx of face-to-face attendees. In June, the Bureau of Labor Statistics reported 9.3 million job openings in the U.S. — the highest number recorded since the organization started tracking the figure in 2000 — with 1.6 million unfilled positions in the leisure and hospitality industry.

“We have had some labor challenges in those leisure destinations where we have seen demand spike so quickly,” Tony Capuano, CEO of Marriott, said in an interview with Yahoo Finance Live. “So, in South Florida, Texas, Arizona, we are running job fairs and we are providing some one-time hiring incentives to get the hotels staffed.”

Marriott is hardly the only hotelier facing a staffing challenge, and leisure destination properties aren’t the only venues coming up short in operational support. At the beginning of the summer, Hilton’s jobs portal listed more than 3,500 openings and Hyatt had more than 4,300 postings for qualified employees. Despite offering signing bonuses and other carrots to attract potential employees, it’s clear that hoteliers will still be hard pressed to find adequate staff.

Bjorn Hanson

Bjorn Hanson

The situation may not become dire, however, said Bjorn Hanson, Ph.D., CRE, CFE, adjunct professor at New York University’s Jonathan M. Tisch Center of Hospitality, and an active industry researcher and consultant. There is still a lower demand for rooms, he told Convene, which should relieve some of the pressure to recruit employees in the short term.

“Based on the current outlook for 2022,” Hanson said, looking at projections from research firms PwC, STR, and CBRE, “demand will return to approximately 2015 levels in terms of occupied room nights. So, there will not be the same need for bell persons, room attendants, and housekeeping staff [compared with early 2020]. For many of those positions that are so difficult to staff right now, the need is a bit less.”

Meanwhile, Hanson expects that interest from prospective employees will return based on two key factors: a reduction in unemployment benefits in the U.S. and the global vaccine rollout. Among employees who have not returned to work for a portfolio of hotels with which he works, the No. 1 reason, Hanson said, is enhanced unemployment benefits, which are due to expire in September. The second most-cited reason, he noted, is “a concern for their own health.”

That’s because “many employees interact with guests at the front desk and handle their belongings, and they do not know if the guests have been vaccinated,” Hanson said. “That will become less of a concern in late 2021 and into 2022.”

A Reduction in Services — and a Likely Rise in Complaints

Hanson thinks the shortage of employees will continue, but he doesn’t expect that the issue will be as severe by the end of the year as it was before the pandemic. In 2019, before the coronavirus reshaped the world, Chip Rogers, president and chief executive of the American Hotel and Lodging Association, had identified “filling essential jobs” as “the single greatest challenge facing our industry.”

So, in a sense, hoteliers already had been trying to figure out how to navigate the shortage, and the pandemic gave many of them a chance to suspend in-room cleaning services, empty minibars, and limit hours for food-and-beverage outlets. Now, it seems that many hotels will continue to keep those measures in place to deal with fewer workers.

“There will be some reduction in services,” Hanson said, “which will make it easier for hotels.” Reducing or eliminating such amenities as 24-hour room service and making housekeeping services optional until the third night of a stay will boost a hotel’s bottom line but not their customer-service profile. “From a convention planner’s point of view, not having all those services will be an issue,” Hanson said. “Some attendees will complain about it.”

To proactively address those complaints, hotels and event organizers will need to work together to articulate the right message. If some measures are perceived as “a health and safety issue, guests will accept it,” Hanson said. “If it comes across like a cost-cutting measure, it will cause dissatisfaction among the traveling public.”

Palmer House

The jobs portal of Hilton, which operates the Palmer House Chicago under a management contract, listed more than 3,500 openings at the beginning of the summer.

Silver Lining: Meetings ‘As Crucial’ As They’ve Ever Been

While some guests may feel dissatisfied, the staff working at hotels right now may be feeling overworked and experiencing burnout. Those feelings are across the board — not just among the front-of-the-house and back-of-the-house employees who have been hard to recruit. Higher-level hospitality jobs also became less appealing over the last 15 months.

“It’s a labor shortage at every level,” Robert Habeeb, founder and CEO of Maverick Hotels, told Chicago’s ABC News. “It’s not just housekeepers, bartenders, and servers. There’s a shortage of managers. I spoke with someone who was a longtime manager at Hilton, for example, and she told me she went to work for Amazon.”

The perks of hotel roles even more closely related to the convention industry — group sales professionals, specifically — have also dwindled. “For a commission salesperson, the revenue on which commissions are based is not going to be as good as it was for a while,” Hanson said, “so it’s a less appealing job.”

However, Hanson thinks that this shortage will be short-lived, too, as hotels prioritize group business. “For owners of hotels, group business will be as crucial as it’s ever been,” he said. “We are almost starting the clock over. We do not have those four-year meeting and convention calendars the way we normally would, so which hotels will win the business two years from now is much more in play. The sense right now is that meeting and convention sales professionals are going to be especially important.”

With group business becoming more valued, Hanson noted that event organizers will enjoy more bargaining power. “Resort fees — especially urban resort fees — will often be waived, and they will negotiate aggressively about such charges as meeting-room breakdown and set-up fees for next year to two,” he said. “The buyer side has the opportunity to be more demanding than before.”

No Reservations, No Responses

While getting fresh towels every day likely isn’t a necessity for event attendees, finding a place to eat dinner on open nights is. That may be an issue for event organizers looking to secure space at restaurants for VIP gatherings or attendees simply looking for a chance to go enjoy an evening on the town.

Sue McCart

Sue McCart

“When it comes to recruiting workforce, in January, 8 percent of restaurant operators rated recruitment and retention of workforce as their top challenge,” Hudson Riehle, senior vice president for research at the National Restaurant Association, said via an email to Convene. “By April, that number had risen to 57 percent.”

“Each day, we get more and more requests for private events, groups wanting to come and celebrate,” Robert Micheli, general manager of Dirty Habit, a restaurant in Washington, D.C.’s Hotel Monaco, said in an interview with NBC’s TODAY. “I don’t want to turn any business away, but it would make any manager feel a little nervous seeing 100-plus guests reserved for the evening and only a handful of professional and skilled team members.”

There are gaps in other essential parts of the business events ecosystem currently as well. Event planners are finding some slowdowns with vendors, and in some cases, a different cast of vendors altogether.

“I have had some slight delays with vendors for the convention center such as security firms,” Sue McCart, president of HFI Event Services, told Convene. “In fact, two companies we reached out to prior to the pandemic are no longer in business or have severely cut back staff. General service contractors have been slower in responding. They are slowly bringing furloughed employees back.”

David McMillin, former Convene associate editor, is a freelance writer based in Chicago.

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