Hiring remains challenging for hotel industry
A new report from the American Hotel & Lodging Association and Oxford Economics projects increases in state and local tax revenue generated by hotels nationally and in Indiana. However, challenges remain in terms of staffing and hotel occupancy compared to before the pandemic. In Indiana, both direct employment and hotel-supported employment this year is projected to be 8.5% lower than 2019.
In an interview with Inside INdiana Business, Indiana Restaurant and Lodging Association CEO Patrick Tamm said now is the time for people looking for a career in the hospitality industry.
“There’s a tremendous vacuum of availability for people to really advance very quickly,” Tamm said. “The hospitality industry – and hotels in specific – if you show up with the right attitude and some basic, can-do spirit, we’ll teach you.”
At the height of the pandemic, more than 90% of Indiana’s hotel employees were out of work. Tamm said the recovery from that loss has been challenging.
“A lot of our quality, mid-level, career management [employees] really transferred a lot of very transferable skills to other industries during the pandemic,” he said. “I mean, across the country, you lost over 680,000 people in the hotel space, and trying to get those folks back is not a snap-of-the-fingers situation, particularly when a lot of our good folks went to other industries where they feel comfortable.”
Hotels across the country have been working to build their employee base back up through several avenues, including higher wages. Nationally, average hotel wages have risen to $23 per hour, compared to $18.5 per hour in 2019.
Tamm said continuing to reach out to both high school and college students about the potential career opportunities in the hospitality industry, as well as those looking for a career change is another important step to building the workforce back up.
“The [White Lodging-J.W. Marriott Jr. School of Hospitality and Tourism Management] at Purdue is one of the best hospitality schools in the country. And then further at Indiana University here in Indianapolis, they have a phenomenal hospitality school as well,” he said. “So we have two great schools really married up with industry quite well. Frankly, they just can’t throw off enough graduates quick enough. So we continuously look for those opportunities as well.”
Hotel occupancy in Indiana is projected to be about 3% lower than pre-pandemic levels by the end of this year. But Tamm said, particularly in Indianapolis, occupancy is still performing above expectations in the coveted Thursday through Saturday category.
“That’s because of our group business, our convention business and frankly, the success of Visit Indy and really our hotel community working as one,” he said. “Oftentimes, we are very successful when we’re together. We approach marketing the opportunities as a solid, cohesive front with Visit Indy, the [Indiana] Sports Corp, whoever that may be, and we also have great sales teams. So if you dissect that time period a little bit, we actually lead the country; we’re very much top three, if not number one, in that Thursday through Sunday segment, which is group business.”
Despite the lower projections for both hotel employment and hotel occupancy, hotel-generated state and local tax revenue is expected to increase for all 50 states; only the District of Columbia had a negative projection.
In Indiana, tax revenues totaled more than $705,000 in 2019 and are estimated to total $820,000 this year, a 16% increase.
“However, you know, that’s top line revenue,” Tamm said. “Just like everything else costs have gone up. Our hotel room rates have significantly increased across the country really to deal with costs. Just like Hoosiers are trying to deal with costs at the grocery store, operating hotels have only increased recently.”
You can view the full AHLA report by clicking here.