Faced with labor shortage, hotels may have to get creative

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From left, AccorHotels' Chris Cahill, Interstate Hotels' Mike Deitemeyer, Ashford Hospitality Trust's Douglas Kessler and IHG's Elie Maalouf on stage at ALIS.

LOS ANGELES -- With U.S. unemployment at historically low rates, concern over a tight labor market was a hot topic across executive panels here at the Americas Lodging Investment Summit. 

Brian Crawford, senior vice president of government affairs for the American Hotel and Lodging Association called labor "the number-one topic" of concern for the trade group.

"One of our board members recently opened up a new hotel in Salt Lake City and did extensive recruiting," said Crawford, who estimates there are roughly 900,000 job openings within the hotel industry. "He went to local colleges, job fairs, posted ads online, was offering far above minimum wage and full benefits. He got zero applicants. That's the type of labor market we're facing across the country."

Similar sentiments were echoed by Wyndham Hotels & Resorts CEO and AH&LA chairman Geoff Ballotti.

"When it comes to finding the jobs that we need, it's the biggest issue that everybody should be worried about and focused on," said Ballotti, adding that further focus on initiatives like cost-free college education programs can help keep employees engaged and ensure they're not poached by other industries.

Best Western Hotels & Resorts CEO David Kong also challenged the industry to adapt its recruiting strategy, explaining that the hotel sector must do a better job of "broadcasting" its career success stories.

"We need to all do our share to communicate that this industry actually offers tremendous career progression for anyone who aspires to do bigger and better things," said Kong. "At the same time, we've been able pay a certain wage scale and attract pretty good talent, but at this point, we have to reconsider how we get people to come in and maybe need to rethink our whole compensation scheme." 

Meanwhile, several executives stressed the important role immigration reform plays in the matter, with Interstate Hotels & Resorts CEO Mike Deitemeyer, among others, putting the onus on the current administration to loosen regulations restricting the flow of immigrant labor.

"From a policy perspective, we've got to get our heads around [immigration]," said Deitemeyer. "The reality in the hospitality space is that, going back generations, those entry-level positions have been filled by immigrants, and that's incredibly critical to us as an industry as we grow."

InterContinental Hotels Group CEO of the Americas Elie Maalouf urged the industry to think outside the box when it comes to tackling labor-related challenges. He took a relatively contrarian view on the matter.

"I hope we have low unemployment forever," said Maalouf. "It creates some stresses on our business, but I'd rather be solving low unemployment issues than high unemployment and low occupancy issues. How should we approach it? I think [our industry] has to stand for something more than profit, margins, occupancy and RevPAR, which is all fundamental, but people want to feel they're part of something great. Everyone can find a different paycheck. If a place just isn't nice or fun to be at, it doesn't work."

Margaritaville Holdings CEO John Cohlan expressed a similar sentiment, telling the ALIS audience that despite the current landscape, he sees Margaritaville resorts as having an "advantage on labor" due to the brand's focus on fostering an enjoyable work environment.

"I'm always stunned when we have our labor fairs because of the number of people who apply," said Cohlan. "One of the things about consolidation is that it's harder to have a personality when you're part of a big consolidated entity. But when you come apply for a job at Margaritaville, we want you to be part of the experience, and that's more fun than being a hotel clerk at a generic property."

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