By Jessie Kim
The fragile state of the hospitality industry, bearing the many cracks of high turnover, labor and skills shortages, has been further strained by the lasting effects of the initial coronavirus outbreak and persisting climate of uncertainty. Within the United States, revenue per available room fell by 11.6 percent, while restaurant spending declined by a third in March of 2020 (Duarte Alonso, et al.). The overall structural integrity of the hospitality industry poses great insecurity and vulnerability for hospitality workers, especially the disadvantaged younger and women demographics (Baum, et al.).
The coinciding issue of declining guest service quality seems to follow as an inherent sequel. According to the J.D. Power 2021 North America Third-Party Hotel Management Guest Satisfaction Benchmark, guests staying at branded hotels from May 2020 through June 2021 reported lower stay satisfaction compared to previous years (Troy). The benchmark was based on six factors: “arrival and departure; cost and fees; food and beverage; guest room; hotel facilities; and services and amenities” (Troy). Of these categories, the food and beverage and staff service sectors were the primary suspects for weighing down the overall guest satisfaction average. With the current volatility of the hospitality workforce—most hospitality organizations facing an unprecedented labor shortage in failing to regroup furloughed employees—maintaining hotel brand standards and guest services under limited operations proves to be a growing challenge.
Prior to the pandemic, the Bureau of Labor Statistics identified the Food and Hospitality sector to possess an annual turnover rate of 73.8 percent—among the highest of all industries—an indication that more than six percent of staff are leaving their positions each month (DeMicco & Liu). This issue has only exacerbated, as more than 50 percent of former hospitality workers have expressed no intention of returning to their previous position or any hospitality job without an incentive such as increased pay, better benefits, and schedule flexibility (“Q2 2021 United States Job Market Report”). According to Nick Bunker, economic research director for North America at the Indeed Hiring Lab, “We’re in a situation where the bargaining power and the labor market has shifted toward job seekers, especially in recent months.” Even with monetary and supplemental benefits, 38 percent of former hospitality employees indicate no desire to return to the hospitality industry (“Q2 2021 United States Job Market Report”).
Essentially, as restrictions ease and hotel demands steadily climb to pre-pandemic levels, the lasting impact of the coronavirus on the hospitality workforce and consequent labor shortage has defeated guests’ optimism for hospitality organizations to return to normalcy in providing the same extent of service and care (Troy). Without the foundation of businesses in the service industry—those who carry out the service—the seamless return to full capacity accommodations is a far cry from reality and a source of disillusionment for returning guests. When faced with a crisis, businesses first adjust their resources temporarily to resume operations as soon as possible and to minimize economic damage (Canhoto & Wei). Unfortunately, in desperate times, these necessary adjustments often take precedence over guest service.
The two portraits, one of declining guest satisfaction and the other of a diminishing workforce, illustrate a rather dismal portrayal of the long-term sustainability of the hospitality industry. However, European Small to Medium Enterprises (SMEs) have proposed a model of resilience for hospitality organizations in distress (Duarte Alonso, et al.). Research revealed the importance of “change management process capabilities in enhancing resilience, notably, by implementing long term planning, embracing operational elements of change management, and consideration of people and organizational dimensions” (Duarte Alonso, et al.).
Pal et al. (2014) proposed a similar model of SME resilience, which highlights three key assets. The first two allude to the firm’s resourcefulness and dynamic competitiveness, such as material and intangible capabilities, as well as flexibility, respectively (Duarte Alonso, et al.). Most notably, however, the third asset emphasizes learning and culture, referring to the influence of leadership on employee collectiveness, sense making, and well-being (Duarte Alonso, et al.).
The stakeholder theory, attesting to the value of the interconnected relationships between the business and its customers, suppliers, investors, and most importantly, employees, has been extensively applied in hospitality sector research, especially in studying the causal relationship between corporate social responsibility (CSR) activities and a firm’s financial performance (Canhoto & Wei). Relevant research has established the beneficial impact on increasing firm value by recognizing all legitimate stakeholders, including those front-of-house employees that are disadvantaged yet integral to hospitality businesses, which ensures the elasticity and resilience of a firm in an increasingly dynamic landscape.
Summarily, employees, as key stakeholders, rightfully have claim over job security. Regardless of the steps taken by individual hospitality organizations, deep-rooted issues, further complicated by COVID, cannot be solved case by case (Hermes & Mainela). The devastating impact on the financial health of businesses have induced a domino effect on the future employability of the current, limited staff. Therefore, perhaps now more than ever, retaining skilled staff is essential to post-pandemic recovery. Thus, employers should monitor the perceived job risk of their employees and employ the necessary resources to incentivize and motivate them to continue pursuing their career within hospitality (Canhoto & Wei). It is the responsibility of hospitality employers, despite current economic constraints, to invest in their employees. Commitment to training is essential to creating an unwavering foundation of support for hospitality employees to become adept in their craft and restore their confidence in job security. There has been little to no collective discourse among businesses in the hospitality industry, especially in regard to the significance of training and its profound role in maintaining a healthy workforce (Baum, et al.). However, the AHA urges other hospitality organizations to join in on the industry-wide discussion, at any level, immediately.
The Academy for Hospitality Arts is committed to challenging the current framework of the hospitality work environment to deliver excellence in service. Leveraging decades of industry knowledge and 130 years of combined experience in hotels, restaurants, country clubs, fine dining, and entertainment complexes, the AHA enables hospitality professionals of all skill levels to acquire the knowledge and practical skills necessary to excel in restaurant and catering. In addition to online and in-person training and consultancy offerings, the AHA caters to individuals at all points in their careers by providing comprehensive services for any and all hospitality needs. For more information, please visit ahaexcellence.com or contact our team firstname.lastname@example.org.