Hospitality Got Too Comfortable: EHL's Achim Schmitt on Decline, Talent and the Limits of Technology

At the EHL HumanX Summit in Lausanne, Simone Puorto sat down with Dr Achim Schmitt, Dean of EHL Hospitality Business School and a professor of strategic management whose research is in why organisations decline and how they turn themselves around. He brought that lens to his own industry, and the diagnosis was not flattering. Hospitality, in his reading, has spent years being comfortable, and comfort is exactly what gets organisations into trouble. The full conversation is available to watch below.

Hospitality got too comfortable

Simone asked whether there are warning signs the industry is still not taking seriously. Schmitt pointed straight at comfort. For thirty or forty years, he said, hospitality was one of the least innovative industries in the world, and the reason sits in its structure. One party owns the building, another operates the hotel, and a third owns the brand that brings in the guests. Each has its own interest and each wants to grow its share, which works well as long as the whole thing keeps growing.

For a long time it did. The industry expanded year after year and generated new jobs at a remarkable rate. That growth, he argued, let everyone avoid hard questions. Now, in established markets like Switzerland, it is getting difficult to find both guests and staff, and a comfortable industry suddenly has to reinvent itself. Much of that reinvention, in his view, comes down to two things: bringing digital tools into hotels, and bringing talent in.

Retention matters more than attraction

Simone framed the squeeze plainly. Tourist numbers keep climbing, by some forecasts sharply, while fewer people join the industry and turnover stays high, so the temptation is to do more with fewer people. Schmitt agreed the pressure is real but called it a slippery slope. If the industry decides it can simply run on fewer people, it stops making the effort to attract anyone, and that takes you back to square one. 

His emphasis is on keeping people rather than recruiting them. Hospitality has some of the worst turnover rates of any industry, he said, running at thirty to forty percent in many markets and higher in parts of the budget segment. That is a problem in itself. If a graduate knows that every two or three years they will have a completely new team around them, and may not last either, the industry looks unattractive, because people want to be recognised, to belong to a team and to a culture. So the first job, he argued, is to keep people, keep them happy and develop them, which means real investment in learning and development. Do that well and attraction tends to follow.

Short-term fixes for long-term problems

This led into a question Schmitt thinks about a lot, the risk of trading long-term strength for short-term results. He gave a concrete example from talent. When a country runs out of local workers, the quick fix is to bring in workforce from abroad, as new markets in the Middle East have done. It solves the immediate gap. The trouble shows up later, because guests increasingly want an authentic, local experience. A Swiss, French, Italian or Spanish hotel is expected to have staff who carry that culture, and imported labour cannot fully provide it. A short-term fix has created a long-term problem.

Simone put it as three options: create people, import people or substitute people. Schmitt agreed that only the first works over time. Importing is not sustainable, and substituting humans with technology will not solve it either, because authentic experiences still need local talent. He added a point that cuts against the usual logic. As hotels reduce the number of human touch points, the ones that remain matter all the more, so each becomes a more visible and more important part of the experience.

Teaching for jobs that do not exist yet

Simone noted that most of the jobs today's students will eventually do may not exist yet, and asked how a school like EHL copes with that. Schmitt pointed to the World Economic Forum's work on the skills the future will demand. The striking thing, he said, is that in a more and more digital world AI literacy rises up the list, but the majority of the top competencies for 2030 and beyond are still human ones: resilience, creativity, teamwork, problem-solving and a willingness to keep learning.

Those, he noted, are the things hospitality has always taught. Deal with an unhappy guest and you are under pressure, so you need resilience, a creative solution, your teammates and the right digital tools all at once. EHL has therefore shifted from training for specific jobs towards training these competencies, which it calls hospitality competencies, with a learner mindset at the centre and industry knowledge layered on top. It is why the same talent now gets hired well beyond hotels. A high-end retail boutique, he pointed out, increasingly borrows hospitality's ideas and even its food and drink experiences, and as industries blur together, hospitality-trained people can move between them.

Why people come back

Underneath all of it, Schmitt has a clear idea of what hospitality really sells. He sees it redefining itself as a human concept, which is the thinking behind HumanX. The old public square, where a village met, has largely gone. Today the places where people still slow down and speak to one another are cafés, restaurants and hotel lobbies, and increasingly gyms. That is hospitality.

He made the point with a finding he likes to quote. A satisfied service customer, by the research he cites, has roughly a forty percent chance of not coming back, because pure service is a transaction. You pay, you expect to be satisfied, and that is the end of it. Add a genuine human connection on top and the same service becomes something else, an experience that leaves a memory and an emotion. It is a memory, not a transaction, and that is what turns a customer into a loyal one. Other industries have noticed, which is why they keep copying hospitality. For Schmitt, who describes his background as fairly classical, it goes back a long way. Hospitality was sacred to the Greeks, a duty they called xenia, and he thinks the industry could do worse than remember that.

Good technology is like the lobby boy

For the HumanX question, Schmitt said he both believes and hopes the future stays human rather than purely digital. Even now, he noted, hotels still need a large human element, partly because the AI experience is not yet good enough to replace it, but mostly because he does not want to live in a world without human contact, something he treats as close to sacred.

He made it personal. Three months ago he came off Instagram, because it stressed him out. The feed bombards you, and the AI behind it makes sure you see more of whatever you linger on, and then you digest all of it alone, often late at night before sleep. The negative things, geopolitics and the rest, sit in your head with no one to help you process them. In the past, he said, parents, siblings and friends helped you put worries in perspective and find some comfort. Students now do that work on their own, and he does not think an AI can take the place of another person in it.

Simone pushed further, recalling a philosopher friend who called the urge to outsource our humanity a kind of death wish, on the grounds that we talk endlessly about what technology can do and never about why. Schmitt took the more hopeful side of the same coin. Technology can make life better, and the answer is to find the balance and treat the glass as half full. He still remembers driving to a library in the nineties to photocopy a few pages, where now the knowledge sits in his pocket. The point is to use it as an enabler that does not replace us. His image for that came from The Grand Budapest Hotel, and the idea of the lobby boy who is invisible yet always present. Good technology, he said, should work the same way, letting you do what you do best without standing in for you. As Simone noted, if it had already replaced us, the two of them would never have met.