U.S. Hotel Labor Wage Growth Speeds Up

U.S. Hotel Labor Wage Growth Speeds Up

Skift Take

Hoteliers will be watching if the fight for scarce workers with the allure of higher pay pressures profits as the recovery unfolds.

Hotels are continuing to wrestle with rising labor costs in the U.S., according to new research.

Through March, wages for workers at U.S. hotels are up 15 percent year-over-year, said CBRE Hotels Research, a division of real estate and investment firm CBRE. In the few years before the pandemic, the average was only 4.1 percent growth a year.

Hotels are especially facing labor inflation. Since 2020, hotel wages have grown 9.6 percent a year on average. Compare that to a smaller 6.7 percent annualized wage growth in the retail sector and an even smaller 5.3 percent average hourly earnings growth across all professions.

U.S. Hotel Labor Wage Growth Speeds Up

You might think the rise in wages is luring people to the sector. But in recent months, hotels have often endured the highest quitting rate across sectors, despite roughly 1 million job openings, according to the Labor Department.

The labor crunch has no end in sight, said CBRE’s Hotels State of the Union report.

In the U.S., the number of job openings per hotel is 50 percent above the 2019 average, CBRE Hotels Research said — having analyzed data from the U.S. Bureau of Labor and CoStar, which sells commercial real-estate data. The hotel sector has a 5.9 percent unemployment rate, still a good amount over the national average of 3.6 percent in March across sectors.

The labor crunch is happening as Americans hit the road again in potentially record-setting numbers.

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