Hoteliers Tackle Challenge of Leisure Demand Outpacing Labor Supply

Labor, or the lack of it, as well as its higher costs, is the biggest topic of the moment in the hotel industry, and it is a challenge that has no easy route to rectification.

Speaking at a panel titled “Labor Market Madness” at the 2021 Hotel Data Conference, Kelsey Fenerty, research analyst at STR, said hotel industry wages for non-supervisory staff are increasing due to simple economics. STR is CoStar Group's hospitality analytics firm.

Demand for rooms in the U.S. is increasing and average daily rate is performing well, but employees are either not coming back to the industry or are not attracted to it, despite rising wages.

“Inflation is rising noticeably, but wages are keeping above that rate, which is not the way traditionally it has been and results in employers having less purchasing power,” Fenerty said. “When demand for labor rises, but supply does not to the same level, then the obvious result is higher wages.”