Skift Take
U.S. hotels continue to publish strong job numbers thanks to summer season leisure travel need, but the market can’t afford to ride on blind optimism. The Delta alternative tossing a wrench in the anticipated return of company travel will show up in tasks reports later this year.
Cameron Sperance
Hotels require employees, and July provided another month of a much-needed increase in work.
The U.S. added 74,000 tasks to the hotel sector last month, the Bureau of Labor Statistics reported Friday. It is the third-highest rate of job development since the start of the pandemic. The hospitality and leisure sector, which includes bars and dining establishments, included 380,000 jobs last month– a major factor in decreasing the total joblessness rate to 5.4 percent.
The task gains come as hotel executives continue to come to grips with ways to recruit more staff following a catastrophic wave of task layoffs and furloughs last year as an outcome of the pandemic.
“It was a great report,” said American Hotel & Lodging Association CEO Chip Rogers. “It continues to mirror the growth we’re seeing in the industry.”
The hotel sector’s joblessness rate fell three points to 14.6 percent– still above the national average but well below the almost half joblessness rate seen during the worst of the pandemic drop in travel need in 2015.
If hotel job growth continued at its present speed, the market might be back to pre-pandemic employment levels by the end of the year, Rogers said. However, he expects job growth to flatten or even decrease later on this year when summertime travel need dissipates.
Hotel executives are still grappling with how to fill employment opportunities amidst a sharp rise in leisure travel demand this summertime. The typical U.S. hotel occupancy rate last week was a bit more than 70 percent, according to STR. It was also the 2nd time this summer U.S. hotels out-performed 2019 levels in terms of profits per readily available space, the market’s key efficiency metric.
Marriott is “working to deal with the labor challenges we are seeing” mainly in rapidly recovering markets like south Florida, Texas, and Arizona, the company’s CEO Anthony Capuano said on a profits call this week.
“The labor environment has been challenging, putting significant pressure on our groups to deliver the high level of service our guests expects from our brands,” Hyatt CEO Mark Hoplamazian said in the future his own company’s investor call.
The July hotel tasks report reveals a recovery under way, but overall leisure and hospitality employment is still down by 1.7 million tasks, or a little more than 10 percent off pre-pandemic levels, according to the Labor Department.
The rise of more infectious stress of the virus like the Delta variant also toss volatility around the recovery heading into fall, when numerous hotel business anticipated and hoped corporate travel would settle back into equipment.
“There are no ifs, ands, or buts about it: Job development is a favorable for the lodging sector. The question is how long lasting is any of this,” stated LW Hospitality Advisors CEO Daniel Lesser. “Sure, these rebounds look excellent, however there’s still pain out there. It’s going to take a while to return to pre-Covid levels, but there’s no concern this is motivating.”
While July was another month of strong task development for the hotel sector, one prospective labor pool is most likely to stay limited as long as the world is handling infectious variations of the infection.
The H2B and J-1 visa programs generate worldwide workers for short-term task positioning in the U.S. Hotel owners in vacation markets like Cape Cod, Massachusetts typically count on these programs to staff up, provided the seasonality of these areas not contributing to full-time, year-round work.
The Biden administration resumed the programs this summertime, however both efforts are likely to remain minimal because of the Delta variant keeping travel restrictions in place across many international borders, U.S. Labor Secretary Marty Walsh said Friday on CNBC.
Hotel companies aren’t simply relying on these foreign employee programs, nevertheless. Incentives like sign-on and retention bonus offers along with wage boosts and flexible work hours are all on the table to induce more personnel. Marriott even launched a marketing campaign promoting the chances to be had within the hotel industry.
“There’s no question the market has been able to determine a couple of things over the last few months to get people back into the labor force,” Rogers stated. “The market finds out rapidly when you have a problem as big as this labor problem has been for us.”