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The Labor Crisis in Luxury Hospitality: FTG Pulse
The Labor Crisis in Luxury Hospitality: FTG Pulse
Forbes Travel Guide’s first FTG Pulse survey of general managers and hospitality
executives starkly illustrates the crisis in hiring and retention affecting the luxury
hospitality industry worldwide.
This report documents the scope and impact of the labor crisis, the success of steps
the industry is taking to address it, and leaders’ insights on root causes and potential
long-term solutions. Comments from respondents reveal a consensus that the industry
had fundamental labor issues simmering prior to 2020 that the pandemic has brought
to a boil.
Forbes Travel Guide is the only independent, global rating system for luxury hotels,
restaurants in spas, honoring more than 1,800 properties annually with its prestigious
Five-Star, Four-Star and Recommended awards.
The survey was fielded over an eight-day period from December 8 to 16, 2021, gathering
352 responses.
Key findings:
• 92% of luxury hotels that participated in the survey say they faced increased hiring
challenges in 2021 compared to pre-pandemic – a number that was globally
consistent, with a range from 91-98% in most regions, while slightly less dire in Asia
Pacific (84%) and Central/South America, Caribbean & Bermuda (72%).
• The hiring crunch affects all levels, but especially specialized roles such as chefs
and spa therapists (with 83% reporting moderate to extreme difficulty in hiring) and
non-specialized positions such as reservations, housekeeping, and stewarding (with
77% reporting moderate to extreme difficulty in hiring). North America and Europe
are most acutely affected.
• The necessity to reduce guest capacity and/or service offerings and hours of
operation varies widely by region, with the most impact in North America (71%
curbing operations) and Europe (60%), compared to just 30-40% in the Middle East,
Asia Pacific, and Central/South America, the Caribbean & Bermuda.
NEW/SEASONAL
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FTG Pulse
Survey Results: January 2022
COUNT % OF TOTAL
Europe 55 15.63%
Highlighted comments:
“Line colleagues and mid-management are the most difficult positions to recruit for
currently as people are leaving the industry due to the pandemic and discovering a
better quality of life in other industries that also remunerate better.”
“Culinary is by far the most challenging. Our front office area is tough based on how
skilled they are and tends to have higher turnover. Mid-level leaders in F&B, engineering
and culinary are tough to find. Certain executive level (i.e. engineering, HR and sales) are
tough to find.”
“Skilled positions such as executive sous chef, engineers [are hardest to fill]. I believe
the reason is increased demand for skilled employees and people losing their interest
to work for hotels due to uncertainties.”
“The hospitality industry was already facing labor shortages and becoming less
appealing (long hours, [low] pay, boys club mentality) prior to COVID. As a result of how
quickly people were furloughed/layoffs/job combinations, smart, skilled associates felt
abandoned; therefore, they have responded in kind.”
“Luxury properties are located in expensive areas; people can’t afford to live there
anymore, or the commutes are too long and gas too expensive. … Candidates do not
want to work 6-7 days a week or 70+ hours per week.”
“Furlough [is] allowing many staff … to relocate easily whilst being paid furlough monies
and working elsewhere (other countries), combined with Brexit not allowing us to
recruit in Europe. Many Europeans went home during the Pandemic and did not return
to [the] UK.”
“We have most of our issues in housekeeping. Many of my associates said their
previous co-workers have left to move into factory positions which are paying more.”
“The hospitality industry is less attractive than others and has a poor reputation of long
hours and relatively lower pay.”
“It’s hard to bring on new colleagues when you are already operating so short-staffed
because their work happiness is going to be impacted from day one. Also, people do not
want to work themselves to death as we once did pre-pandemic because we understand
the value of work/life balance.”
Recruitment Incentives
By far, the most successful recruitment tactic in luxury hospitality has been increased
pay, cited by 76% of respondents as “somewhat” or “very” successful. Flexible work
hours and bonuses for referring employees were deemed “somewhat” or “very”
successful by half (52%).
But even these most impactful approaches languished almost entirely in the “somewhat
successful” range. As one respondent noted, “Nothing is really working at the moment;
life/values and priorities [have] changed drastically, and these cannot be [solved] with
material compensations.”
What incentives have been most successful when filling open positions in 2021?
“We have added a retention bonus to be paid out in the next months, [which] has
reduced departing associates by 90%.”
“Additional benefits; life coach; improved internal food; providing information about the
total package meaning salary plus benefits plus company benefits.”
“We are sponsoring TN and L1 visas where possible, but that is very challenging. Either
candidates can’t qualify or J1’s are impacted by travel restrictions.”
- Positioning leaders through thought-leadership activities so that people can see who
they will work with/for.
- We created a recruiting center in a nearby shopping mall that’s one of the busiest in
the US and created an environment that simulates our work culture so that potential
team members can meet and see how we work together.
- We are trying to attract people who want to be a part of a team with a common goal,
rather than go after money and benefits.”
“
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FTG PULSE | JAN 2022
Recruitment Methods
Word of mouth has proved the most useful tactic for recruiting candidates, rated as
“somewhat” or “very” successful by 76% of respondents, followed by job postings on
outside websites (63%) and social media (59%).
What recruitment methods have been most successful when filling open positions in
2021?
“The referral bonus has been most effective as well as a $200 signing bonus 30 days
after hire. We are also working on a retention bonus plan for 2022.”
“Signing bonus originally started working best with a payout at 90 days of work, but
then we started to see the mass exodus after the payout and those individuals filing for
unemployment again.”
“We gave $500 signing bonus as well as $500 referral bonus to any associate who
brings a new hire.”
“Although we have great incentives, there is a shortage of the right talent to provide
luxury experience. We have had to hire non-experienced [candidates] and train and
develop [them].”
“We have opted to go into schools now and offer tuition reimbursement … in hopes to
get them right out of school and commit[ted] to a three-year contract.”
“Refer a friend, £500. In-house living for 4 weeks complimentary. Enhanced benefits,
i.e. Gym “
“
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FTG PULSE | JAN 2022
Operational Impact
The labor crisis has required luxury hotels to rethink their day-to-day operations, putting
added stress on existing employees. Almost all respondents (more than 80% in every
region except Asia Pacific at 62%) have increased hours for existing staff, and most are
using managers to fill the gap on frontline positions.
The majority of luxury hotels North America (71%) and Europe (60%) have been forced
to reduce guest capacity, service offerings or hours of operations – compared to just
30-40% of hotels in other regions.
“We have had to utilize bonus for attendance. Unfortunately … holding people
accountable for attendance has been a big challenge, as you really do need them. … You
[have to] turn a blind eye to attendance standards in order to keep some people.”
“All areas are demanding more pay. We have had some situations where staff has given
an ultimatum. We are experiencing a wage war of sorts in our destination.”
“Staff is burning out, and we are seeing safety issues with burnout both physically and
mentally.”
“This is causing burn out amongst current, loyal and hard-working employees.”
“We received approval from hotel ownership to extend a gratitude incentive payout in
April 2021, which was generous ($87,000 total payroll expense); it was well received and
assisted us in our retention of existing staff.”
“
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Copying, Transmitting and Distributing outside of the intended use is strictly prohibited.
14
“
FTG PULSE | JAN 2022
Highlighted comments:
“I truly believe the hours are the biggest deterrent. Team members want to have ‘normal’
hours (Monday-Friday 8-5), and that is just not possible in a 24/7 business.”
“Manage the environment on behalf of our staff more effectively, pay a fair wage, allow
positive work/life balance, and reward performance constantly.”
“I really think the government would save a lot of money if they stopped all the
incentives and then offer[ed] incentives for going back to work.”
“In countries that are not open to foreign labor: More lobbying of hotel & tourism
groups and associations to put pressure on governments to allow foreign hiring of
international labor on temporary visas/work permits. In countries that are open to
foreign labor (GCC region): Increased wages & incentive schemes, better-defined and
structured labor laws and rules that are fair for both employer and employees. In all
cases, additional costs need to be passed on to consumers even if temporarily until
“
crisis is over.”
“While there need to be a social safety net for people unemployed, we still need people
in low-paid manual jobs that do not require a lot of skill. Despite high unemployment
in many regions, with the financial support obtained from government, there is little
incentive for this group to seek these jobs.”
“I think [we need] more positive press and promotion of the hospitality industry and its
opportunities for young and ambitious workers. Working in a Five-Star environment
builds values and character traits that cannot be found in other industries.”
“Improvement on social packages (more weekly off days, vacations, etc.) and salary
[are] essential and inevitable. Also improvement in benefits packages (transportation
support, grooming support, discounts in department stores and supermarkets,
hospitals) could be helpful.”
“Companies should do the maximum best to keep the employees they have on hand.
“
Offer additional health insurance and paid time off. Ensure that programs and activities
to increase staff engagement and morale are in place. Happy staff will lead to happy
guests. In turn this will increase your reputation as an employer of choice and attract the
best.”
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