International Journal of Contemporary Hospitality Management

International labor markets and the migration of labor forces as an alternative solution for labor
shortages in the hospitality industry
Jeong-Gil Choi Robert H. Woods Suzanne K. Murrmann
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Jeong-Gil Choi Robert H. Woods Suzanne K. Murrmann, (2000),"International labor markets and the migration of labor
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 International labor markets and the migration of
labor forces as an alternative solution for labor
shortages in the hospitality industry
Downloaded by New York University At 03:23 12 June 2015 (PT)
Keywords
Hospitality industry, Labour force,
Labour mobility
Abstract
The hospitality industry attracts a
wide variety of workers from a
number of different labor markets.
Since the world is growing smaller
with advanced technologies,
finding required labor around the
globe has become much easier
than ever before. Therefore,
considering only locals as a source
of labor maybe an outdated
recruitment strategy. Continued
globalization of the free market
economy will encourage the
migration of international labor.
This paper discusses international
labor markets and the migration of
labor forces in the hospitality
industry worldwide. It proposes
that current trends and patterns of
worldwide population growth need
to be accounted for in developing
strategies for addressing labor
shortages.
International Journal of
Contemporary Hospitality
Management
12/1 [2000] 61±66
# MCB University Press
[ISSN 0959-6119]
Jeong-Gil Choi
Hospitality and Tourism Management Department, Virginia Polytechnic Institute
and State University, Blacksburg, Virginia, USA
Robert H. Woods
The School of Hospitality Business, Michigan State University, East Lansing,
Michigan, USA
Suzanne K. Murrmann
Virginia Polytechnic Institute and State University, Blacksburg, Virginia, USA
Introduction
The term ``labor market'' refers to the supply
of workers looking for jobs and the jobs
available in a given area. When jobs are
plentiful, employers obviously have a harder
time finding the people they want, and
workers are more particular about the jobs
they will accept. When jobs are scarce,
workers will settle for less and employers
have a better choice.
In the hospitality industry, it is not
difficult to find articles regarding the labor
shortage issue. The literature suggests that
the hospitality industries of the developed
world are experiencing labor shortages
and can expect to face greater shortages in
the future (Lockwood and Guernier, 1990).
Where growth forecasts are generally
optimistic, as in the UK and the USA, the
issue of fulfilling the industry's labor needs
to sustain such growth has become serious
(Belous, 1989).
The labor shortage issue is receiving the
attention of many people in the industry.
As the hospitality industry continues to
grow more rapidly, it will face the critical
question of whether there is a way to achieve
a balance between supply and demand in
labor. To help answer this question and give
a solution, it is necessary to review the
nature, characteristics, and trends of the
hospitality employment and worldwide
population distributions. The nature and
statistics of the hotel employment as an
aspect of the hospitality industry are
discussed below.
The current issue and full text archive of this journal is available at
http://www.emerald-library.com
Hotel employment
Labor intensity of the industry
The hotel is a business unit that is both labor
and capital intensive. In order to meet the
needs of the guest, the hotel must employ
many people, often on an around-the-clock
basis. The hotel offers opportunities for work
for many employees who do not possess the
education or skills for other jobs. Also, the
hotel is often the first job for many just
beginning their transition into the world of
work. Thus, the hotel fulfills an important
societal role in many communities.
The industry employs in excess of
11,194,418 people worldwide and represents
approximately 5 per cent of the world's total
travel and tourism workforce (WTTC, 1995).
By far the largest concentration of
employment is in the Americas (the
Caribbean, Central America, North America,
and South America), where over 4,061,966
individuals earn their living in this industry.
This compares with the EFTA (European
Free Trade Association) countries, which are
estimated to employ 1,873,722 people. While
there are more hotels on the European
continent than in North America, in Europe
many hotels are primarily small
family-owned and managed businesses.
The labor intensity of this industry is
presented in Table I. There is approximately
one employee for every hotel room in the
world. This simple one-to-one ratio validates
the important employment role of this
industry, not only in job creation, but also in
providing gainful employment opportunities
for those seeking entry into the job market
(Olsen and Choi, 1995).
[ 61 ]
 Jeong-Gil, Choi Table I
Robert H. Woods and Summary of worldwide statistics for the hotel industry by global regions
Suzanne K. Murrmann
International labor markets Number of rooms Number of employees
and the migration of labor
forces as an alternative Africa 343,347 1,259,019
solution for labor shortages in
the hospitality industry Caribbean 155,253 277,614
International Journal of
Central America 41,221 232,180
Contemporary Hospitality North America 3,738,977 2,268,256
Management South America 487,787 1,283,917
12/1 [2000] 61±66
Northeast Asia 719,480 1,120,339
Southeast Asia 453,657 730,585
South Asia 159,417 472,092
Australia and Pacific Islands 229,319 539,286
Middle East 162,178 455,432
European Free Trade Association 4,060,546 1,729,258
Other Europe 782,017 826,440
Grand total 11,333,199 11,194,418
Source: IHA White Report (1996)
Downloaded by New York University At 03:23 12 June 2015 (PT)

Classification of labor in the hospitality Table II shows the ten most populous
industry countries. Five countries ± China, India, the
The hospitality industry is diverse in terms USA, Indonesia, and Brazil ± contain half of
of both the types of jobs it offers and the the world's population. Approximately 21 per
nature of the individual it requires. The cent of all people live in China, 16 per cent in
spectrum of occupations range from the India, 5 per cent in the USA, and 3 per cent
unskilled porter to the highly-skilled each in Indonesia and Brazil. Six of the top
manager. The majority of staff employed in ten countries in population size ± China,
the industry is unskilled, of course. These India, Indonesia, Japan, Bangladesh, and
include many food and bar service staff, Pakistan ± are in Asia. Only three of the ten
uniformed staff, and domestics. The most populous nations are considered to be
hospitality industry is, in fact, now the developed (the USA, Russia, and Japan).
largest employer of unskilled labor in many If we look into the population distribution
countries. Semi-skilled laborers include by region, it becomes apparent that most
those people with professional foodservice people are concentrated in a few parts of the
skills, clerical and commercial staff, some world. Four major areas of dense settlement
are East Asia, South Asia, Europe, and the
cooking staff, and some maintenance staff
eastern USA and Canada. In addition, there
(Hornsey and Dann, 1984).
are minor clusters in Southeast Asia, Africa,
Latin America, and along the US Pacific
coast. Figure 1 shows the percentage of world
An alternative source of labor
population by region (de Souza and Stutz,
Uneven distribution of the world's 1994).
population
In 1994, there were more than 5 billion people Table II
in the world; these people were very The ten most populous countries
unevenly distributed (de Souza and Stutz,
Population in 1992 Per cent of
1994). Recent statistics show that Europe (511 Country (in millions) world population
million) and Russia (149 million), along with
the other republics of the Soviet Union (135 China 1,166 21
India 883 16
million), were home to about 16 per cent;
USA 256 5
Africa (654 million) to 12 per cent; Latin
Indonesia 185 3
America (453 million) to 8 per cent; North
Brazil 151 3
America (283 million) to 5 per cent; and Russia 149 3
Oceania (28 million) to less than 1 per cent of Japan 124 2
the world's population (WTTC, 1995). Given Pakistan 122 2
such large variations among continents, it is Bangladesh 111 2
not surprising that national population Nigeria 90 2
figures show even more variability. Ten out
Source: Population Reference Bureau (1992), World
of the world's nearly 200 countries account Population Data Sheet
for two-thirds of the world's people.
[ 62 ]
 Jeong-Gil, Choi
Robert H. Woods and
Suzanne K. Murrmann
International labor markets
and the migration of labor
forces as an alternative
solution for labor shortages in
the hospitality industry
International Journal of
Contemporary Hospitality
Management
12/1 [2000] 61±66
Downloaded by New York University At 03:23 12 June 2015 (PT)
Figure 1 9 per cent, and for university graduates 12
Percentage of world population by region per cent. In Bangladesh, about 40 per cent of
people with a master's degree are either
unemployed or underemployed. In Thailand
during 1973-1983, unemployment rates among
university graduates ranged from 20 per cent
to 35 per cent. In Africa, too, secondary
school graduates are more likely to be
unemployed than those with less education.
Graduate unemployment, not yet as high as
in some Asian countries, is expected to rise
in the years ahead with cuts in recruitment
to government service, where many
graduates would previously have expected
automatic employment.
The current worry regarding the labor
shortage can be solved by using these
unevenly distributed labor forces throughout
the world. The labor shortage in the

international market, and in the hospitality

The United Nations projects world
population at 6.1 billion in 2000 and 8.5 billion
in 2050. Almost all of this increase will occur
in the developing countries. The largest
absolute increase is projected for Asia,
reflecting its huge population base. Future
population growth will further accentuate
the uneven distribution of the world's
population.
Unemployed highly skilled and educated
labor in the world
Education and training are often the keys to
employment, but in developing countries
many remain unemployed despite, or
because of, their high level of education. In
Asian countries, the least educated often
have the lowest recorded unemployment
rates, since a majority are involved in
subsistence activities such as farming.
Table III shows unemployment in the
selected countries by educational level. In
India, while the unemployment rate in 1989
for people with no education was 2 per cent,
that for those with secondary education was
industry particularly, means that there is a
shortage of skilled labor, not unskilled labor
forces. There are plenty of unskilled workers
who want to have a job in the world.
Migration of labor in the hospitality
industry
Causes of migration
Most people move for economic reasons in
general; they move to take better-paying jobs
or to search for jobs in new area (WTTC,
1995). Others move to fulfill personal dreams.
Whatever the motive, migrants generally
seek better lives. The causes of migration in
the hospitality industry can be divided into
``push-and pull'' factors. Push factors in the
hospitality industry would include poor
wages, long or unsociable hours, highly
individualized job functions, strong
competition, sexual discrimination,
awkward shifts, and lack of respect from the
public. Pull factors include flexible hours,
opportunities for females and minorities,
opportunities to learn a skill, and so on.

Table III
Unemployment rate in the selected countries for people with specific education
Country Year No education Primary Secondary Tertiary
Algeria 1989 9.2 24.2 28.9 5.8
Tunisia 1989 11.2 20.4 17.4 5.2
Ghana 1988 3.4 7.6 13.5 14.7
Kenya 1986 13.5 15.6 22.2 5.4
Zimbabwe 1987 1.6 6.8 11.6
Malaysia 1985 4.7 22.9 30.6 3.9
India 1989 2.0 3.0 9.0 12.0
Indonesia 1985 0.6 1.5 7.5 5.3
Sri Lanka 1981 4.5 15.5 15.1 4.2
Cote d'lvoire 1985 1.0 5.2 21.7 13.7
Source: Human Development Report (1993), UNDP

[ 63 ]
 Jeong-Gil, Choi
Robert H. Woods and
Suzanne K. Murrmann
International labor markets
and the migration of labor
forces as an alternative
solution for labor shortages in
the hospitality industry
International Journal of
Contemporary Hospitality
Management
12/1 [2000] 61±66
Downloaded by New York University At 03:23 12 June 2015 (PT)
[ 64 ]
It is generally believed that labor emigration
from a country can give rise to several
potential benefits. For instance, it can relieve
unemployment and under-employment, it
can be a source of foreign exchange, it can
lead to the acquisition of skills, and, in
general, it can improve material welfare by
increasing per capita national income. The
potential benefits of labor immigration can
also be considerable. For instance, it can
allow hospitality firms to realize economies
of scale, it can prevent wage inflation in an
industry experiencing labor shortages, it can
facilitate investment by ensuring that new
capacity can be adequately staffed, and
generally, it makes available labor services
without the need to finance the formation of
the human capital from which those services
are derived.
Value adding laborers: skilled and
educated immigrants
Only skilled and educated workers are the
targets of labor immigration by the
hospitality business administrators, and only
those skilled and educated laborers are
welcomed in the world labor markets. The
skilled and educated immigrants contribute
their human capital to the economy so that
they create job opportunities for other
workers. In this case, the positive impacts of
the immigrants on the host countries are
achieved.
A recent study analyzed the impact of
immigrants on native workers' earnings and
employment (Sorensen et al., 1992). Changes
in earnings as a function of increases in
immigrant population were estimated for 33
metropolitan statistical areas (MSAs) in the
USA. The study found that if highly-skilled
and educated immigrants are brought in as
worker-preference immigrants, they can be
productive and will create job opportunities
for other people who want to have a job in the
domestic market. It is believed, then, that
only skilled and educated immigrants are
welcomed in the international labor markets
because they add value.
Number of immigrant labor forces in the
hospitality industry
Until recently, labor for the hospitality
industry was recruited primarily on a local
basis regardless of geographical location.
However, a new trend is developing. As it is
shown in Table IV, using the US workforce as
an example, immigrants are increasingly
joining the workforce. In 1985, the immigrant
men and women represented only 7 percent
of the total US labor force. However, this
group is expected to represent 22 percent of
Table IV
New workers entering the workforce between
1985 and 2000
1985 Net new workers
labor force 1985-2000
US workers (%) (%)
Native white men 47 15
Native white women 36 42
Native non-white men 5 7
Native non-white women 5 13
Immigrant men 4 13
Immigrant women 3 9
Source: Hudson Institute
the total US labor force within only a few
years.
Unfortunately, the number of people
migrating in the international hospitality
industry worldwide at this time is not
available. An alternative method that can
measure the size of the immigrant workforce
in the hospitality industry is that of
analyzing the immigrant figures in the entire
service industry in the world.
Table V shows the economically active,
foreign-born population (EAP) of Canada, the
USA and France. France and the USA are
included because those are major tourist
countries in the world (Pearce, 1995). Canada
is included for comparison.
In 1990, the foreign-born labor forces in the
service industry represented 37.7 per cent
(1,932,316) of the total economically active
foreign-born population (EAP) of the USA.
Approximately 455,261 (41.6 per cent of the
EAP) foreign-born labor forces worked in the
France's services industry in 1990. Also,
significant number of foreign-born labor
forces (about 29.8 per cent of the EAP)
involved in the Canada's service industry in
1991.
Interestingly, most of immigrant workers
in Canada and France are young (15 to 24 age
group) and the gender pattern of immigrant
workers in France (world's top destination
country) is quite different from that of
Canada. The table shows that young
immigrants are increasingly joining the
workforce in the service industry. As
Figure 2 indicates, more male workers
immigrated to Canada than to France. This
pattern, however, is completely reversed for
female immigrants. In fact, female service
workers who immigrated to France represent
more than 30 per cent of EAP in all age
groups.
Migration is a complex phenomenon that
raises many questions. Why do people move?
What factors influence the intensity of a
 Jeong-Gil, Choi
Robert H. Woods and
Suzanne K. Murrmann
International labor markets
and the migration of labor
forces as an alternative
solution for labor shortages in
the hospitality industry
International Journal of
Contemporary Hospitality
Management
12/1 [2000] 61±66
migratory flow? What are the effects of
migration on the hospitality industry? What
are the patterns of migration? And what are
the immigrant laws in different labor
markets? This study employed data for the
economically active foreign-born population
working in the service industry. It would be
possible to provide more useful information
were data on the hospitality industry
available.
Obstacles for labor migration
Migration has demographic, social, and
economic effects, due especially to the fact
that migrants tend to be young adults and
often the more ambitious and better-educated
members of a society. Not only are there legal
matters to migration, but families tend to be
socially and culturally rooted in their
country of birth, and such attachments are
difficult to overcome.

Table V
Economically active foreign-born population by occupation, gender and age
Canada (1991) USA (1990) France (1990)
Gender/age EAP SWs Per cent EAP SWs Per cent EAP SWs Per cent
Male
Total 6,233,999 903,910 14.5
Downloaded by New York University At 03:23 12 June 2015 (PT)

Canada France
15 plus 1,512,640 180,110 11.9 1,684,275 164,480 9.8
15-19 42,070 11,190 26.6 12,148 1,568 12.9
20-24 102,015 18,030 17.7 77,164 8,768 11.4
25-34 320,920 39,005 12.2 390,695 41,408 10.6
35-44 416,570 41,100 9.9 570,352 53,348 9.4
45-54 352,620 35,065 9.9 441,871 39,516 8.9
55-59 135,755 16,850 12.4 176,553 18,116 10.3
60-64 93,445 12,540 13.4
65-69 30,815 4,465 14.5
60 plus 15,492 1,756 11.3
70 plus 18,430 1,875 10.2
Female
Total 4,430,980 1,028,406 23.2
Canada France
15 plus 1,201,930 215,460 17.9 913,560 290,781 31.8
15-19 37,990 8,735 23.0 6,820 2,644 38.8
20-24 92,600 17,100 18.5 54,764 16,280 29.7
25-34 280,160 46,210 16.5 255,045 64,773 25.4
35-44 366,375 59,920 16.4 308,860 92,896 30.1
45-54 270,765 49,875 18.4 196,962 73,156 37.1
55-59 82,100 18,055 22.0 82,732 37,808 45.7
60-64 46,590 11,090 23.8
65-69 16,385 3,210 19.6
60 plus 8,377 3,224 38.5
70 plus 8,980 1,275 14.2

Figure 2
Immigration to France and Canada by gender

[ 65 ]
 Jeong-Gil, Choi
Robert H. Woods and
Suzanne K. Murrmann
International labor markets
and the migration of labor
forces as an alternative
solution for labor shortages in
the hospitality industry
International Journal of
Contemporary Hospitality
Management
12/1 [2000] 61±66
Downloaded by New York University At 03:23 12 June 2015 (PT)
[ 66 ]
Immigration can also be costly. Some of the
most skilled and educated members of the
population of Third World countries migrate
to developed countries. Each year, the
income transferred through the ``brain
drain'' to the USA amounts to billions of
dollars, although billions of dollars are also
sent back home in the form of remittances to
family members who stayed behind. Stahl
(1986) conducted a study regarding
international labor migration as it affects the
countries that constitute the Association of
Southeast Asian Nations ± Brunei, Indonesia,
Malaysia, the Philippines, Singapore and
Thailand. The study tried to establish how
international labor migrated in the ASEAN
countries and to evaluate its importance to
their economies. Stahl concluded that the
benefits of international migration accrue
disproportionately to the labor importing
countries. In some cases, the country of
emigration may justifiably demand
compensation against the losses it incurs
(even when these fall short of the gains to the
receiving country), especially when it has
spent resources to train the migrating
specialists.
Conclusion
It is believed that the unevenly distributed
population in the world is the main reason
for labor shortage in particular regions. The
world population is actually growing, and
there are abundant highly educated and
skilled laborers in the world. Education and
training are often put forward as the keys to
employment, but in developing countries
many remain unemployed despite, or
because of, their high level of education.
Recruiting those skilled but unemployed
labor forces in one part of the word would
provide a solution for skilled labor shortage
in the other part of the world.
Immigration has played a vital role in
supplying the developed world's hospitality
industry's labor market, and to some extent
this can be expected to continue. But, it is not
clear whether international migration in the
hospitality industry serves as a positive or
negative factor for specific economies.
Empirical work needs to be done on this
question. Attempts should also be made to
assess the consequences of labor migration in
the hospitality industry for the world
economy as a whole.
The one thing that is clear is that the
international migration in the hospitality
industry will increase dramatically in the
near future along with the advance of
information technologies. Increasingly, the
use of information technologies is seen as an
accelerator for these labor markets. With the
advanced information technologies, the labor
demand and supply become more globally
accessible, and individuals and organizations
will find their needs more effectively and
efficiently. The trend will be supported by the
unevenly distributed population in the
world, the unemployment of highly educated
and skilled labor in the world, the high labor
demand in the hospitality industry along
with the growth of the industry, and the
economic and other benefits of the migration
to the world as a whole.
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