As staffing levels recover, costs become a concern
 
As staffing levels recover, costs become a concern
12 JUNE 2020 7:28 AM

Data points to a returning U.S. hotel workforce, which means rising labor costs that some hoteliers will have to balance with less-than-breakeven occupancies.

REPORT FROM THE U.S.—Hotels in the U.S. continue to rehire and replace their team members as occupancy grows on both weekends and weekdays. The latest labor-management data from Hotel Effectiveness, for the week of 7 June, shows hotels across the U.S. employed 40% of the number of team members they had during pre-COVID-19 times.

However, most hotels are still operating below break-even occupancy levels, and as labor costs rise along with staffing, the pressure to maintain reasonable cashflows grows as well. Volatile demand means that staffing models that were once stable should now be variable, and new brand standards and guest expectations add additional pressure to the situation.

Addressing this challenge requires a revised approach to staffing. Labor standards, which connect operational drivers like rooms sold to staffing models, are critical to right-sizing each day’s labor expense. Since it is not possible to recover excess labor costs from previous days, schedules will need to flex with operational needs. Done well, a dynamic labor model can free up expenses that can be better spent on revenue-driving activities, resulting in a faster recovery.

The data and chart above represent a sample of more than 3,300 same-store hotels and excludes hotels which have been closed during the analyzed period.

Del Ross is Chief Revenue Officer for Hotel Effectiveness.

The assertions expressed in this article do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please feel free to comment or contact an editor with any questions or concerns.

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