Chris Adams, luxury hospitality industry disruptor and CEO & Founder of lifestyle consulting agency, Ellis Adams Group.
If you have traveled within the past year, it is clear that the hospitality industry has been hit hard by the pandemic. The industry as a whole is struggling to find labor. There are simply not enough people. In many areas, hotels and restaurants have completely reopened but with limited service and hour-plus wait times. We are seeing restaurants filled with empty tables and only two servers trying to keep up with immense demand.
But what I believe is more alarming is what we are seeing happen during the recovery phase. According to a recent poll of 13,000 job seekers, more than half of U.S. hospitality workers said they wouldn’t go back to their jobs, while over a third said they aren’t even considering reentering the industry. The rate of pay, workload and feelings of being unappreciated are just a few of the factors for the exodus.
In my view as the founder of a hospitality consulting firm, we are watching a significant turning point in the hospitality industry — a moment in time when we will be able to look back and directly correlate a shift in the way our industry operates. In my opinion, the people who run this industry are taking back the power that is rightfully theirs.
I believe there are two sides to this coin:
1. Consumers: I’ve found that many consumers are now demanding their money has more value than before. They have felt the pain of job loss and the fear of no employment throughout the Covid-19 pandemic. As they adjust to the new normal, the spending of dollars has a new, weighted importance for many. People are spending with the excitement of living again, but with a clear and high expectation of the experience they expect to be attached to that dollar. The perceived value of their hard-earned cash has increased for some consumers coming out of the pandemic, and they will not accept any mediocrity.
2. Hospitality workers: Many hospitality teams now feel they were viewed as a number, a mere cog in the wheel. Those who thought they were crucial to the business were often let go with what felt like ease. I think the hospitality industry in the U.S. has pushed the “bottom line” to the point (now combined with a pandemic) of distinction. In my view, publicly traded companies, hedge funds and real estate groups have contributed to turning an industry that is about servanthood and caring for others into a machine driven on spreadsheets. The individuals the industry relies on for success are leaving in droves as the industry they have given much of their lives to has failed them. The industry stopped investing in them, and they have now stopped padding its investments. Some companies eliminated training and continued to drive low wages, yet they asked more of employees.
Well, they have spoken. Hospitality workers have used the power they realized they had this entire time. They walked away.
Now the industry is scrambling — scrambling for people and scrambling to give guests an experience. An experience, mind you, that requires more in the eyes of some consumers. The hospitality industry now has less help while it seems that guests expect more. Overall, we have a problem.
I think the time is now to disrupt. The time is now to force change. Maybe it’s new investors, maybe it’s a different way of driving the bottom line, but change must happen, and it must happen now. The hospitality industry must take on its biggest challenge yet — revolutionizing how business is done in a centuries-old industry.
How does a worldwide industry pivot?
I think the industry needs to realign and restructure programs that are highly efficient and take a lot less people to execute.
An approach that provides a new model for financial and community responsibility is one that fully integrates a community into a hotel model. Think of the local deli, liquor store and dry cleaner all encompassed within the hotel community.
And the key component? Raising up a new generation of hospitality professionals and investing in them. We need to cultivate the backbone of the industry by hiring people with passion and heart for serving others. By creating an intensive education program for hospitality professionals, the industry can efficiently prepare a new wave of workers. Then the industry can maintain sustainability by pushing forward with continued education, development and career growth to maximize potential and optimize output.
I believe the hospitality industry needs to invest in its professionals and set a new standard for wages in every position — including the traditionally tipped positions. The U.S. should consider the European approach and eliminate the pressure of guests leaving gratuities while hospitality teams hope there is enough to cover their expenses.
As pressure builds to reinvent the hospitality model, the time is now to rethink the entire physical hotel structure that has been the same for 50 years. The industry must redesign its structures in a way that creates experiential moments and drives guest engagement by incorporating more of a community aspect.
The industry must also see this mass labor exodus as a time to start investing highly in the people who run it by cultivating passionate professionals through giving them unbelievable skillsets and the opportunity to make money and serve guests with pride.
The hospitality industry needs to change the mindset of how it operates, starting from its core foundations.