The Pandemic Is Changing The Way Hotels Operate — In North Carolina And Elsewhere
As summer travel starts to wind down, the hotel industry is taking stock of how well it's rebounding from last year when many people ditched their travel plans. Last month, we checked in with Lynn Minges, the president and CEO of the North Carolina Restaurant and Lodging Association, who talked about the job loss during the pandemic.
"We found ourselves working with about half our workforce," Minges said. "There were hotels that had maybe five employees left at a facility, and those are hotels that maybe employed 100-200 people, depending on the scale."
As part of our series Rebuilding Charlotte, we're taking a closer look at the pandemic's impact on hotel workers. WFAE's "Morning Edition" host, Marshall Terry, is joined by Emily Reaves. She's a lecturer in the College of Hospitality Management at Johnson & Wales University.
Marshall Terry: Thanks for joining us.
Emily Reaves: Thank you for having me, Marshall.
Terry: As we just heard from the North Carolina Restaurant and Lodging Association, the hotel industry shed a large number of jobs last year and not all of them are coming back. Hilton has announced that it's doing away with daily housekeeping at most of its properties, offering instead housekeeping upon request. Fewer room cleanings means hotels need fewer housekeepers, leaving thousands of workers without a job to go back to. What are you seeing industrywide? Are others following Hilton's example?
Reaves: You are exactly right there. Specifically, with stayover service in hotels, a lot of brands are getting rid of it. We're really at the point in the industry where we have a huge opportunity to change the operating model and find those items that maybe aren't as necessary to an overall guest experience. And it's not so much about taking away from the job, but changing what our roles inside the hotels will look like now with a new, more efficient way of doing things.
Terry: And you said just now some services that may not be needed as they used to be, or at least not in the same way. Like what are you talking about?
Reaves: Well, as we've seen with this pandemic, the hotel industry has really gravitated toward new technological advances. So things that normally would have been done in person, we can now do through texting, through app technology. So there are all kinds of things that may take up time, whether it be for a front desk agent or a runner or even housekeeping that we can now shift to take less time, be more efficient and kind of change our daily roles in the hotel.
Terry: Now, you mentioned front desk workers and we've heard about touchless check-ins. Now, are front desk workers going to be a thing of the past?
Reaves: As far as I can tell, Marshall, front desk workers are here to stay. Hotels, in its essence, are about the guest experience. And one of the key factors in the guest experience is that first point of contact, your guest service member. So while they may not be spending their time on the computer manually checking you in, it may be more about the relationships that they develop with the guests and what they do, whether it be texting with the guest or solving problems or creating opportunities as they arrive, between the guest them themselves.
Terry: Can you give us a sense of what percentage of a hotel's budget pays for labor?
Reaves: So how hotels budget, they typically forecast out their projected revenue on a month-to-month basis. Hotel labor costs are usually projected to take up about 30% of a hotel's projected revenue. Overall, when you're budgeting and looking at your gross operating profit, the labor is about 50% of your overall expenses. So labor is a huge percentage of the overall expenses of a hotel.
Terry: We've been hearing from restaurants about how they're desperate for workers right now. Is the hotel industry just as desperate as restaurants for workers? Or are they filling gaps in any way by cutting services?
Reaves: As they reopen different outlets, everyone is hiring. And we've seen them offer things like restaurants where signing bonuses, special higher pay to be competitive. Some hotels I've read are even trying to offer a new thing, which I've never heard of before in hotels, but doing "gig pay" where they pay the workers on a daily basis instead of a weekly or biweekly paycheck to try to entice people to enter into the industry because they're getting a paycheck at the end of the day.
Terry: Is it working?
Reaves: I have never heard of it being successful in the Carolinas. I have heard of some states out West doing it and it being successful because you're attracting a different type of talent that wasn't already in the industry.
Terry: What's the average hourly wage for hotel workers?
Reaves: It depends on the position, but anywhere from minimum wage up to $20 an hour.
Terry: As we mentioned earlier, summer travel gave the hotel industry a shot in the arm. But what about business travel and conferences, which usually begin to increase in the fall? Do you see that return of hotel business increasing the need for workers in hotels?
Reaves: Business and convention travel will absolutely bring demand back to the levels that we need it to be at. Unfortunately, it really does depend on what happens with this delta variant, especially in a city like Charlotte, where we rely so heavily on that convention business. We're hoping to see that return in the fall. Some people are saying it's not going to come until quarter one of 2022, but at least small business travel we have seen starting to come back into these big cities.
Terry: And what happens if it doesn't come back as planned? I mean, what do hotels do then? Could we see more layoffs?
Reaves: It's hard to say. Like a lot of other industries, we are terribly dependent on what happens with the delta variant.
Terry: What's your biggest concern for those who worked in the hotel industry and are looking for their old jobs back?
Reaves: My biggest concern is people still wanting to leave the hotel industry and search for something else that they would think would be more stable through a pandemic or something similar. At the end of the day, hotels are about creating experiences, and that skill is very easily transferred into other industries. So while some may have a lot of trepidation still about coming back into the industry, I think we should really just look at it as an industry that needs workers and that wants workers, and that at the end of the day, you can take that experience and transfer it if you need to.
Terry: Thank you for joining us.
Reaves: Thank you for your time. I appreciate it.
Terry: Emily Reaves is a lecturer in the College of Hospitality Management at Johnson and Wales University.