With travel demand accelerating rapidly, the hospitality industry is experiencing a new challenge: labor shortages resulting in sharply rising labor cost, which consumes as much as 60%-80% of RevPAR (CBRE). In the U.S. alone, hotels need to hire 600,000 more employees by summer to be able to meet demand (BIS.gov). Right now there are 171,800 open positions on LinkedIn for hospitality jobs in the U.S.

Wages in hospitality operations - frontline position such as housekeeping, front desk, wait staff, line cooks, etc. - are up more than 20% since April 2020 (Hotel Effectiveness). Hotels and restaurants alike are offering sign-up bonuses, higher wages and even cash payments to candidates just to come for an interview. In the same time productivity is down due to influx of inexperienced staff, since many of the experienced hospitality professionals left the industry due to furloughs and layoffs during the pandemic.

The question is, how can the hospitality industry solve the current labor shortages and unsustainable labor cost through technology innovations, automation, mobility, robotization and next gen technology applications?

Christine Demen Meier
Christine Demen Meier
Managing Director, Les Roches

Next-gen technologies like AI, robotics, automation, mobility and IoT are removing low-skilled jobs from our industry and will create a raft of new skilled roles. We know this. It's already happening, and will see hospitality workforces shift dramatically in the future. But right now, we need tech to attract people, not replace them.

The current labor shortage crisis can only be solved by bringing people back to hospitality. We need technology to reconnect employers and candidates, to redefine what work looks like and re-engage workers who are moving away from service industries. The core hospitality sectors of hotels and restaurants need to better-utilize the gig economy and embrace more cost-effective marketplace solutions, instead of clinging to outdated and RevPAR-damaging recruitment models.

Platforms like The Hospitality Gig, MogulRecruiter and Caterer are all using algorithms, AI and big data to connect businesses with the labor they need, while also providing a more flexible solution to the ebb and flow of demand for low-skilled positions. High-tech robots are coming, but right now we need high-tech recruitment.

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