232 | Wage Pressures: How to plug cost leaks in your hotel’s labor pool (Labor and Hiring Part 2)

At the peak of a great upward climb from the Great Recession, the U.S. lodging industry is seeing a leveling off in business performance.

During the 25th annual Lodging Conference in Phoenix last week, many industry experts talked about a new normal of muted revenue gains and thinner profit margins as expenses continue to grow.

The biggest and fastest-growing operating expense in the hotel industry today is labor.

STR reports U.S. hotels saw labor costs grow an average 3.7 percent from 2016 through 2018. Those three years are the only period in the past 20 years in which labor costs exceeded revenue growth.

Although industry analysts cite much-talked-about causes of increased labor costs such as minimum wage laws and a tight employment market, some of the reasons your hotel is wrestling with the expense are not so obvious.

In this episode of Lodging Leaders – the second in a two-part series about hiring and labor – we explore how you can get a grip on labor costs, become more efficient in scheduling employee hours, and manage employees’ work expectations.

We hear from Del Ross, chief revenue officer at Hotel Effectiveness; Bryan DeCort, executive vice president at Hotel Equities; and Bruce Barishman, vice president of operational excellence at Interstate Hotels & Resorts. We also include excerpts from a presentation by economist Bernard Baumohl at The Lodging Conference.

Resources and Links

• Del Ross, chief revenue officer at Hotel Effectiveness
• Bryan DeCort, executive vice president at Hotel Equities
• Bruce Barishman, vice president of operational excellence at Interstate Hotels & Resorts
• Economist Bernard Baumohl
• The Lodging Conference