Hotel operators are hopeful their established company cultures will be a useful tool in making sure they come out of the current crisis with the best employees possible.
REPORT FROM THE U.S.—Hotel management companies are in a difficult position beyond just having severely decreased cash flows. As people-driven businesses with drastically reduced operations, they are faced with the challenge of taking care of their own people and keeping them engaged while many are furloughed, and others are trying to navigate new ways of doing business.
Speaking during the “Workforce and labor issues” session during the LodgingStream online conference, organized by Long Live Lodging,* Bryan Tubaugh, EVP at Focus Hospitality Management, described the last two months as “the longest year of my life.”
“We’re balancing a tricky situation with how much we can communicate with furloughed employees,” he said, as panelists noted they are not technically allowed to discuss work with those employees. “We’re planning to have those communications in the next week now that hopefully we’ve seen the worst of this, and we hope to start bringing them back soon. I hate to use the phrase ‘the new normal,’ but we have to take time to balance where we need to be and where we were at” before the crisis.
Bryan DeCort, EVP at Hotel Equities, said management companies like his are constantly on the lookout for any best practices in handling the current environment because “there is no playbook” for the way things are today.
“We’re a culture-first company, and to support them, we want to keep them engaged in their down time,” he said. “But that’s tricky. We’ve been navigating the (Paycheck Protection Program) process and there will be an adjustment in people’s compensation. Hopefully that will allow us to bring people back in a tiered environment as business comes back.”
He did note, however, that the PPP does have some serious flaws, and expectations to be back at full staffing by the end of June are unrealistic.
New competition for employees
Before the crisis hit, the hotel industry was desperately in need of high-quality employees that it had to fight tooth and nail for amid record-low unemployment.
Today, the pool of potential employees has grown exponentially, but that doesn’t mean competition for the best has gone away. DeCort noted he’s seen more qualified candidates available to hire today than any time in his decades in the industry, and he’s “equally amazed that some peers are actively hiring.”
But many of the best hotel employees might not be coming back to the industry as the crisis wraps up, said Del Ross, CRO for Hotel Effectiveness.
“It’s hard to say (how many employees come back) because we’re losing them to aggressive employers like Amazon and Walmart, who have jobs that are a lot less challenging in a lot of ways,” he said, noting a love of the hotel business is going to be a key driver in retaining employees.
Doug Tutt, COO at Hcareers, said he doesn’t expect there to be a mass exodus out of the industry, though.
“There’s something to be said for the fact that—at the end of the day—we’re all creatures of habit,” he said. “There are certainly employees I’m speaking with that have to find immediate work when benefits run out, but I think people will come back to what they know.”
DeCort said culture-driven companies like Hotel Equities will want to use that as a tool to woo some of the better hotel workers from other companies.
“With a rich and healthy culture, people gravitate toward you,” he said. “You have to show them they have a path to contribute, a path to influence, and a path to succession and personal growth.”
He said culture can also help companies avoid getting into bidding wars for talent. In fact, he expects compensation to trend downward.
“I’m not sure that $100,000 base compensation job is the same as it was yesterday,” he said. “There’s going to be a recalibration of wages, not just for hourly employees but also salaried.”
Tubaugh said companies like Focus Hospitality must be flexible in their recruitment process, and they already have a history of doing things like virtual job fairs, which are only more important in the age of social distancing.
“We’ll continue to use those tools and find ways to look at applicants not just on paper,” he said.
This is also a chance to win over talent from outside the hotel industry, he said, but it’s key to find the right kind of people.
“This industry is in your blood,” he said. “You’re an entertainer and a host. It’s what we do.”
Preparing for the future
Panelists agreed that the hotel industry, both collectively and from a labor perspective, will have to make a difficult pivot to an unclear future.
Teaching and training are going to be of the utmost importance, especially in a period where demand has decreased.
“I think we’re going to lean heavily on leadership development and ask our leaders to do a lot more than they have in the past,” Tubaugh said. “While doing that, we also have to teach our culture to make sure we’re keeping the top talent on board.”
Ross said the interest in cross-training employees to different disciplines has spiked across the industry.
“People are taking that seriously, and (the industry) needs to reinvent some jobs, which can make them more interesting and create more stickiness for employees,” he said.
Part of the training efforts will be designed to address guests’ changing needs and desires, particularly around things like cleanliness, and DeCort said his company is working closely with brands to ensure employees know exactly what’s expected of them.
“We’re working closely with our brand partners to understand those expectations,” he said.
He also noted the current environment presents some unique challenges to hoteliers, including how Hotel Equities is currently taking over management operations at a hotel but is unable to send any corporate representatives to the property.
“It’s the first time we’ve virtually transitioned a hotel,” he said. “Our transition team is working with another group, but how do you do things like inventories in a virtual environment? And how do you enact a takeover plan with slim resources? If anyone has the playbook on how to handle it, please send that over to me.”
*Clarification, 7 May 2020: This story has been updated to include the conference's organizer.