U.S. Hotel Labor Wage Growth Speeds Up

Skift grip

Hoteliers will watch whether the fight for scarce workers with the lure of higher wage pressures pays off as the recovery unfolds.

Sean O’Neill

Hotels continue to struggle with rising labor costs in the United States, according to new research.

Through March, wages for U.S. hotel workers rose 15% year-over-year, said CBRE Hotel Search, a division of real estate and investment firm CBRE. In the few years before the pandemic, the average was only 4.1% growth per year.

Hotels are particularly challenged by labor inflation. Since 2020, hotel salaries have increased by 9.6% per year on average. Compare that to weaker annualized wage growth of 6.7% in the retail sector and even weaker average hourly earnings growth of 5.3% across all occupations.

One would think that rising wages attract people to the sector. But in recent months, hotels have often suffered the highest quit rate of any industry, despite around 1 million job openings, according to the Labor Department.

The labor shortage has no end in sight, says CBRE Hotel State of the Union Report.

In the United States, the number of job openings per hotel is 50% higher than the 2019 average, said CBRE Hotels Research – after analyzing data from the US Bureau of Labor and CoStar, which sells commercial real estate data. The hospitality sector has an unemployment rate of 5.9%, still a good amount above the national average of 3.6% in March across all sectors.

The labor shortage comes as Americans hit the road again in potentially record numbers.