The U.S. hotel sector will this year finally surpass 2019 levels on a few performance metrics, according to research commissioned by the country’s largest hotel lobby.
2023 nominal room revenue is projected to be $197.48 billion, versus $170.35 billion in 2019. But these numbers are not adjusted for inflation, and real revenue recovery will likely take several more years.
Average hotel occupancy is expected to reach 63.8 percent in 2023 — just shy of 2019’s 65.9 percent.
2023 room-night demand is forecast to be 1.3 billion occupied room nights versus 1.29 billion in 2019.
U.S. hotels are projected to employ 2.09 million people in 2023, down from 2.35 million in 2019.
Hotels and restaurants continue to lag in filling positions in the post-pandemic recovery, and new research suggests that it’s anger — rather than fear, laziness, pay disputes, or another factor — that’s a critical component creating the worker shortfall.
During the worst of the pandemic, many lodging and restaurant owners had to slash their workforces. Today the hospitality industry continues to lag in filling jobs relative to other U.S. sectors. Employment in hospitality hasn’t returned to 2019 levels according to the U.S. Bureau of Labor Statistics, even though data shows that workers are receiving wages that are higher on average than 2019 levels.
Four researchers reviewed more than 325 online surveys and more than 100 responses to a scenario-based study of current, former, and aspiring hospitality industry professionals. They found that trust had been broken with many workers.
“Contingency plans such as offering employees continuing benefits, alternative work arrangements, and/or training programs, may go along way towards attenuating negative emotions towards the organization and hospitality industry,” the researchers wrote in the study.
They concluded that it’s critical for organizations to find ways to communicate that they value their employees and are prepared to protect employee interests in the face of future hardships.
“It’s important that organizations understand this anger among workers and build better communication with them,” said teaching fellow Iuliana Popa. “If there’s another crisis in the industry, they’ll want to know there’s a plan in place and that they’ll be protected, financially, emotionally and physically.”
Staffing problems in the hospitality industry continue to linger. Now, two countries are aiming to amend visa regulations to counter them.
A petition has been launched in the UK that seeks to allow European Union nationals to come to the UK to work in hospitality for up to two years.
“The government should create a special visa for people from the EU countries to come to the UK to work in the hospitality industry for a period of up to 2 years, similar to the Seasonal Work visa for horticulture workers. Some countries have visas like this to support the hospitality sector,” the petition says.
“There is a massive shortage of qualified labour in the UK to fill vacancies that were in many cases previously filled by EU staff. For years people from the EU countries were the backbone of the hospitality industry and many were affected by COVID and subsequently by Brexit’s final terms. Many restaurants are struggling to find people with experience and willingness to work.”
As of Sept. 2 it had secured more than 16,400 signatures. Once a petition reaches 10,000 the UK government is obliged to respond. At 100,000 signatures, the topic is considered for debate in Parliament.
The UK left the European Union on 31 Jan. 2020, with free movement between the UK and the European Union ending on 1 Jan. 2021, when a new points-based immigration process was set up that is far more restrictive than before Brexit.
Brexit is being blamed for many things, but staff shortages seem to be the biggest bugbear.
“Supplier labor will continue to be an issue,” Ryanair boss Michael O’Leary said in May this year. “The UK will continue to be very challenged. The labor market is very inflexible post Brexit. You can’t bring in young Europeans.”
The other countries in the Community of Portuguese language countries are East Timor, Cape Verde, Guinea-Bissau, Equatorial Guinea, Mozambique and Sao Tome and Principe.
Immigrants from these countries have had to get a visa if they plan to stay in Portugal for more than 90 days, Reuters reported, and often have to wait many months to get visa approval.
Employers’ confederations have said there are no workers available in key sectors such as hotels, agriculture and construction.
Australia’s Corporate Travel Management has managed to convert the recovery in global business trips into a small profit, after more than two years of tough trading conditions.
It was boosted in particular by winning large accounts off rival agencies, according to CEO Jamie Pherous, and three pandemic-era acquisitions, the most recent being 1000 Mile Travel Group, an all-share transaction worth $1.3 million carried out last month.
The Brisbane-headquartered agency reported a 2022 full-year profit of $41.4 million on an underlying earnings before interest, taxation, depreciation, and amortization (or EBITDA) basis. That’s for the 12 months up to June 30, 2022, and follows total transaction value of $3.51 billion — more than three times the $1.12 billion recorded in 2021. Revenue was $269.1 million.
In 2021 it made a loss of $5 million, on an EBITDA basis.
New Wins
Speaking during an earnings call on Tuesday, Pherous said new clients were contributing to its results, with those clients having moved from its competitors, rather than previously having had unmanaged travel programs.
“We’re winning a lot of business and most of it’s off peers,” he said. “A lot of peers are in difficult positions and can’t reinvest in technology or people at the moment.”
In its 2022 first half, which covers the six months to Dec. 31, 2021, it won $3.27 billion of new corporate business. That amount equates to how much those companies spent on travel during 2019.
“We’re one of the very few (agencies) that can demonstrate we can convert recovering activity into revenue and profit before tax,” he added.
The CTM boss also played down any concerns over staffing levels. It recruited 950 employees in the 12 months, and more than doubled staff in its recently acquired Helloworld division from 125 to 285 people.
Pherous also said that CTM had an “out of the box” recruitment strategy.
“We’re finding people from outside the industry, and put them through our academy. Our senior executives talk about their youth and exuberance,” he said. “We’re nearly at the resources we need. We think it’s critical, we’re not in that race to barter and bargain for staff.”
The European Union’s travel and tourism sector recovery is at risk unless 1.2 million jobs are filled, according to the World Travel & Tourism Council and European Travel Commission.
Vacancies are likely to remain unfilled during the busy summer period, with travel agencies predicted to be the worst hit with a 30 percent shortfall of workers.
Airlines and hotels are likely to suffer one in five unfilled vacancies, representing 21 percent and 22 percent staff shortage respectively.
“Europe showed one of the strongest recoveries in 2021, ahead of the global average. However, current shortages of labor can delay this trend and put additional pressure on an already embattled sector,” said Julia Simpson, council president and CEO, in a statement.
In 2020, when the pandemic was at its peak, 1.7 million direct jobs were lost, they claimed. In 2021, when governments began to ease travel restrictions, the sector’s direct contribution to the European Union’s economy recovered by 30.4 percent and recovered 571,000 jobs.
This year, the council projects the sector’s recovery will continue to accelerate and almost reach pre-pandemic levels with an expected 32.9 percent increase in its direct contribution to the union’s economy.
The pair have identified six measures that governments and the private sector can implement to address the issue:
Facilitate labour mobility within countries and across borders and strengthen collaboration at all levels, providing visas and work permits
Enable flexible and remote working where feasible — particularly if travel restrictions still prevent workers from moving freely across borders
Ensure decent work, provide social safety nets and highlight career growth opportunities — with work that is safe, fair, productive, and meaningful — to reinforce the attractiveness of the sector as a career choice and retain new talent
Upskill and reskill talent and offer comprehensive training as well as create — to equip the workforce with new and improved skills
Create and promote education and apprenticeships — with effective policies, and public-private collaboration, that support educational programs and apprentice-based training
Adopt innovative technological and digital solutions to improve daily operations, as well as mobility and border security to ensure safe and seamless travel and an enhanced customer experience.
“Governments and the private sector need to come together to provide the best opportunities for people looking for the great career opportunities that the travel sector offers,” Simpson added.
Are flight crews sometimes the last to know about cancellations?
Veteran flight attendant Kristie Koerbel’s tips for travelers on navigating the current travel chaos and cancellations, as published in The New York Times, also had some interesting tidbits about the airline industry as a business.
Shown here, a Delta flight attendant offers complimentary welcome Bellini cocktails in November 2019 for an inaugural flight. Delta Air Lines
Koerbel wrote that it is wise to download the app of the airline you are flying — or trying to fly, that is — because “in some cases you will know a flight is canceled before the flight crew even knows.” She also said travelers can use the app to track bags, the whereabouts of the incoming flight, and to rebook.
Another interesting factoid? Here’s why you will be chilled flying in short-sleeves.
“Here is a flight attendant secret: We sometimes keep the airplane cold intentionally. For people who struggle with airsickness, heat makes it worse. We don’t want anyone to use those sick sacks,” Koerbel wrote.
Koerbel tied some of the spate of flight cancellations to a fact that many people in the travel industry already know — there are time limits to how long flight crews can work.
“Something that is not common knowledge is that flight crews have time limits on how long they can work, generally 12 to 16 hours at a stretch,” Koerbel wrote. “Besides being unsafe, it’s illegal for us to fly longer than that. If your flight crew gets delayed and hits that time, it doesn’t matter if you have somewhere to be, we are done when we are done. The way things are right now, there aren’t many back up crews, so your flight may be canceled.”
The labor shortage at airlines and airports isn’t all about flight attendants and pilots.
“Now we are short-staffed and overworked,” she wrote. “Not just pilots and flight attendants, but also ground crews. You may not think about ground crews, but without them there is no one to park the planes, drive the jet bridges so you can board and get off, load your bags and retrieve them, or scan boarding passes.”
All of those airline buyouts or staff cuts during the pandemic have come home to roost, so to speak, as workers bolted to leave the airline industry. When Amazon and Uber offer comparable compensation to low-paid ground crews, the airline industry has a problem.
