Immigration policies translate to 'labor crisis' for hotels

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The Hotel Group offered stay bonuses to staff its new Homewood Suites outside Salt Lake City.
The Hotel Group offered stay bonuses to staff its new Homewood Suites outside Salt Lake City.

When the Hotel Group, a Seattle-based company that owns and operates hotels around the country, recently held a job fair before opening a new Homewood Suites outside Salt Lake City, it didn't attract a single applicant for housekeeper.

When it renovated and reopened the Kansas City Airport Marriott, it had to deploy free shuttles to and from downtown to be able to recruit enough workers.

Finally, to get enough employees at both hotels, president and CEO Douglas Dreher said, the company implemented "stay bonuses" that reward workers -- one for those who stay 90 days and another for 180 days.

Those are just a few examples of how hoteliers around the country are getting creative with pay, bonuses, benefits and recruiting practices to offset what Dreher said is the tightest labor market he has seen in more than 30 years in the business, adding, "We have what really is a labor crisis."

The Labor Department estimates that some 600,000 hospitality jobs are currently unfilled, and with unemployment below 4% and little immediate hope for comprehensive immigration reform, hoteliers expect things are going to get worse before they get better.

That, of course, comes as good news for workers, who are being lured with higher pay, better benefits, bonuses and a number of new opportunities for apprenticeships, debt-free tuition and other training and education, both from individual hotels and through national partnerships established by the American Hotel & Lodging Association (AH&LA).

But with no relief in sight, the labor shortage and the associated costs of attracting and retaining qualified candidates were top concerns at the recent New York University International Hospitality Investment Conference, where experts agreed the problem could ultimately drag down a record run of 98 months of growth in revenue per available room (RevPAR).

"It was, arguably, the No. 1 topic of conversation among our members," said Brian Crawford, senior vice president of government affairs for the AH&LA.

Crawford said the shortage of so-called H2B visas for low-skilled workers, combined with the difficulty in obtaining J-1 visas for temporary workers, are among the contributing problems the group is lobbying hard to address.

Under the H2B program, he said, companies must certify that they have tried and cannot fill a job domestically. Currently, he said, 180,000 such positions have been certified by the Labor Department, but Congress has capped the limit at 66,000 workers per year. The J-1 visa program has similar restrictions. 

Although the administration did issue 15,000 extra H2B visas in May, Crawford said getting relief is difficult in the current political climate.

"There is pushback," he said. "There are groups that call this program amnesty and misclassify it as part of an immigration program. It is not. It is a small-business issue. It is a jobs issue. ... But the politics surrounding immigration and immigration reform are certainly not helping our cause in Washington in trying to get policymakers to approve legislation that would improve this program."

At the same time, the Trump administration is rescinding a program that gave temporary protection status to residents of countries including Honduras, Nicaragua and Nepal, meaning workers from those countries will soon have to leave.

Add in the uncertainty of the fate of undocumented immigrants brought in as children, and a whole other segment of hospitality workers is in limbo, Crawford said.

An influx of workers from hurricane-battered Puerto Rico has provided some temporary respite, according to a recent report from the Associated Press, but Crawford said that barely put a dent in the growing worker shortfall.

It's a problem, Crawford said, that is affecting the industry across the board but is particularly acute in the resort industry, which relies on temporary workers.

"These companies are doing everything they can to hire legal workers," he said. "Before they can even apply for [J-1] visas, they have to prove they have taken significant steps ... to hire domestically. But the reality is there is no domestic workforce to draw on, and those folks who are out of work don't want seasonal work; they want permanent work. So it's just very challenging."

And while Crawford said the group is lobbying hard for comprehensive immigration reform and more and easier-to-obtain worker visas, it's the economy more than anything that is driving the worker shortage.

"With unemployment as low as it is, you just have a very tight and competitive labor market," he said. "Whether it's hotels or industries, everyone is scrambling to find qualified workers. It's a top priority."

To address the problem, the AH&LA and hotel companies are spending more money and getting creative with their hiring programs, including putting their people on the constant lookout for new talent.

Brian McSherry, COO of M&R Hotel Management in Great Neck, N.Y., said, "The old way to find people was to put an ad in the paper, and they came. But that doesn't exist anymore."

Today, he said, M&R has a full-time "talent manager" who uses social media and other new tools to find people well-suited to the hospitality field. When they find someone they think is a good fit, McSherry said, they hire them, "whether you have a job or not."

The Hotel Group's Dreher said recruiting at his company never stops. His managers all carry "You impressed me!" cards that they give out to people they encounter, with instructions on how to apply.

But just offering good pay, good benefits and a pleasant culture is not enough today, Dreher said, as was evidenced in Salt Lake City and Kansas City.

'The old way to find people was to put an ad in the paper. That doesn't exist anymore.'– Brian McSherry, M&R Hotel Management

In addition to stay bonuses, he said, the Hotel Group, among other things, also offers employee referral awards, partners with and offers job fairs at colleges and is part of the AH&LA's new management apprentice program designed to "deepen our bench strength." 

Such programs, however, are costly. For example, McSherry estimates it now costs about $4,000 to recruit a single worker.

That is a growing concern.

Crawford warned that while "RevPAR is good, and domestic travel is up, the No. 1 cost driver when you build a hotel is staffing it. A lot of the brands are looking at new technology to try to figure out a way around this. I suppose in a macro sense it is good that unemployment is as low as it is. But if you are a business owner, it is very challenging."

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