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Hotels hit by labor shortage as travel demand roars back

Yahoo Finance’s Dani Romero joins the Live show to discuss the hospitality industry labor shortage.

Video transcript

- Switching gears here, travel demand roaring back in a big way. But hotels now, they have another problem. Customers are returning, but many employees, they're not. Yahoo Finance's Dani Romero joins us with more on what's going on in this industry. Dani?

DANI ROMERO: Yeah, so, obviously when the pandemic hit, that really disseminated the hotel sector. Tens of thousands of people lost their jobs in this industry. And now that they're in recovery mode, they are still struggling in that labor department.

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A new survey out by American Hotel and Lodging Association found that 97% of its members say that they've reported being understaffed. And 49% have said that they were severely understaffed. So that really paints the dim picture right here. Because of this labor gap, now these hotel operators have to really rethink their strategies right now when it comes to bringing back these workers. So either increasing pay, also benefits, making operational tweaks is another big thing, and also other steps.

Now, according to Indeed.com, I found that the hotel industry has about 132,000 hotel job openings. Other major hotel operators remain far below their pandemic employment totals. In an annual report from Marriott International, they said that they've employed about 120,000 workers in at their properties at the end of 2021, which is below their levels in 2019.

But if you look at the jobs report right now, leisure and hospitality added 67,000 jobs as growth continued in food services as well. However, employment in leisure and hospitality is down by 1.3 million since February of 2020.

- Dani, that's a huge number of openings, 132,000. That's just a really I think a worker base tired of working for little pay and challenging jobs. But when you talk to folks in the industry, is there any indication that they are starting to get offers for much higher wages?

DANI ROMERO: Yeah, I think that's a really good question. The other thing I really asked about to these hotel operators is didn't they know about this? I mean, didn't they know that the travel demand was going to be here this summer? And they said that they did know, right, they were well aware of it. Of course, increase in pay is a big perk.

But I'm sure, Brian, you've been to a hotel right now. Those operational tweaks, they have been pretty prevalent right now. I'm sure you see that some hotels tell you, please remind, please tell us if you want your room to be cleaned every day.

So that really shows you some of those staffing shortages right there. The other thing that they are really lacking on right now is housekeeping. About 56% from this survey say that housekeeping is really the big challenge for a lot of these hotel operators.

- All right, a ton to take into consideration within the leisure and hospitality sector and employment situation within there. Dani, thanks so much for breaking this down for us this morning.