Why US hotels are missing more than 238,000 employees

Tourism is returning to the United States, but hotel workers are not.

During the pandemic, hotels and resorts learned to operate with leaner staffing models. Three years later, Covid-era band-aids such as self-service kiosks and less frequent housekeeping have become the new normal for many businesses attempting to deal with rising labor costs and perpetual vacancies.

While employment in many industries has now surpassed 2020 levels, the lodging industry employs approximately 238,000 fewer workers than before the health crisis — a gap that is likely to persist.

Companies see these initiatives “as a solution to the efficiency issues,” according to Alexi Khajavi, president of Questex, an information services firm. But there’s also “the fact that they don’t think the labor issues will be resolved anytime soon.”

Nowhere in the United States is the fallout more visible than in Las Vegas, where one in every four people works in the leisure and hospitality industry. Despite job growth in other industries, the city’s accommodation industry has a more than 17,000 worker shortage, raising the unemployment rate to 6.1%, the highest of any major metropolitan area in the country.

Throughout Las Vegas, technology is on full display. With self-check-in and mobile-entry, major hotels enable guests to access their rooms without requiring much human interaction. Cocktails are being mixed by drink-dispensing machines at resorts such as the MGM Grand.And at Marriott International Inc.’s Renaissance, robots named Elvis and Priscilla are making room deliveries.

Distrust in new technologies and cost-cutting measures may eventually contribute to the Culinary Workers Union’s first citywide strike in nearly four decades. Contracts covering 40,000 union members have recently expired, and a strike vote is set for next week.

Holly Lang, 45, has seen close to 20 bartenders look for new jobs as drink-dispensing machines have gained popularity in recent years. Companies can get one of Smart Bar USA’s automated dispensing machines fully installed and trained to use for around $40,000 USD.

With fewer bartenders, the machines can dispense drinks quickly. However, Lang, a unionized server at MGM Grand for nearly two decades, says the new technology requires her to balance more tasks. Machines can become clogged or fail to process orders she enters, putting her in a difficult position with customers, she explained.

“We’ve kind of had to take on the role of bartending even though that wasn’t something we actually signed up for,” Lang explained.

According to research firm GlobalData Plc, the service robotics industry is expected to reach $216 billion by 2030 as staffing shortages accelerate the need for automating processes such as customer service and cleaning.

Smart Bar Co-Managing Member Barry Fieldman claims that his products were not created to replace workers, but rather to make their jobs easier. Bartenders can make more drinks, increasing their earnings for themselves and the business. It’s a “win-win situation,” he says.

Recent cyberattacks on MGM Resorts International and Caesars Entertainment Inc. demonstrate how technological progress can also bring new challenges. MGM’s websites, reservations and payment systems, as well as some slot machines in its casinos, were all affected by the attack.

Less Guest Services

However, many hotels are simply providing fewer guest services, such as less frequent housekeeping or reduced operating hours for the front desk, bar, and pool. According to a recent survey, more than one-fourth of hotel operators said the front office function would be phased out of their properties within the next five years.

Employees have long fought to ensure that new technologies and cost-cutting practices are not introduced at the expense of their jobs, from dockworkers to screenwriters. The United Auto Workers launched an unprecedented strike against the nation’s three largest automakers just last week. Though the pandemic necessitated a new approach for hotels, worker resentment has grown as these policies have been implemented.

“Companies — not just here in Vegas, but across the country — are capitalizing on the pandemic,” said Ted Pappageorge, the culinary union’s secretary-treasurer. “We’re seeing these massive corporations try to eliminate labor and replace it with technology, or simply reduce services and attempt to modify guests’ behavior to service themselves.”

Many hotels across the country say they have been attempting to increase headcount, but have had little success. According to a May survey conducted by the American Hotel and Lodging Association, 82% of hotels were experiencing staffing shortages, most notably in housekeeping.

“Those are numbers we never saw before the pandemic,” said AHLA President and CEO Chip Rogers.

Hotels are also looking to improve the guest experience through initiatives such as digital customer service and flexible housekeeping schedules. “Technology isn’t going away, and I think that’s a huge benefit,” Rogers said.

While the Culinary Workers Union’s most recent contract included protections such as free retraining when new technologies were introduced, not all Las Vegas hospitality workers are unionized. Last year, less than 3% of all leisure and hospitality workers in the United States were union members.

“If we weren’t here, Las Vegas wouldn’t exist,” said LaDonna Teeters, 59, a unionized bartender who has worked for Park MGM for 27 years. “We want to be able to go back to having just one job so that we can continue to make the guest experience that much stronger and more memorable.”

The union is a significant economic and political force, attracting attention for its size, door-knocking campaigns, and potential to swing key elections in the battleground state of Nevada.

Those who have lost their jobs in recent years may find it difficult to find another with comparable pay and skill level in the increasingly diverse Las Vegas economy. Only one in every four adults in the city has a college degree, and recent job creation in sectors such as health care and manufacturing has highlighted the skills gap.

“Those 20,000 jobs are not coming back in the same way that they were pre-pandemic,” said Stavan Corbett, interim executive director for economic and workforce development at the College of Southern Nevada. Instead, they’re resurfacing in new industries or even new job titles within the hospitality industry.

“A lot of those people might not qualify for the job they had two years ago and did for 15, 20 years,” he says.

MGM, Nevada’s largest employer, exemplifies some of the nuances of lingering staffing shortages. After hiring more than 22,000 workers last year, the company is on track for another record recruiting year, but workers don’t stay on the job for long, according to Rebecca Smith, MGM’s vice president of talent acquisition.

MGM still has “mass numbers that we need to fill at all times,” she said, three years after the worst of the Covid-era worker shortages.

Looking ahead, there is optimism for an increase in hotel employment.

Customer satisfaction is frequently directly related to staffing levels, and new hotels, such as the one Fontainebleau will open in Las Vegas later this year, will create thousands of new job opportunities. According to Mark Tricano, president of Fontainebleau Las Vegas, the hotel has received over 45,000 applications for the roughly 240 positions it has advertised.

“What we’re realizing now is that, structurally speaking, we’re still woefully understaffed,” said Khajavi of Questex.

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