Speaking during the Hotel Data Conference, Interstate Hotels & Resorts’ Mike Deitemeyer and Ryman Hospitality Properties’ Colin Reed said finding qualified employees is a massive challenge in the current hospitality landscape.
NASHVILLE, Tennessee—With many people worried about when a broad economic recession could hit and what impact that will have on the hotel industry, the top concern for some leaders speaking at the Hotel Data Conference was the ever-decreasing supply of qualified labor.
Talking during the “‘Wine’ down with the bosses” session, Interstate Hotels & Resorts president and CEO Mike Deitemeyer said labor issues rank ahead of other top concerns such as supply growth, at least in his mind.
“It’s really about people and talent,” he said. “At the end of the day, I’m selling talent and systems. So it’s about what we do to attract great talent, how to keep them and what we do to motivate them going forward.”
Colin Reed, chairman and CEO of Ryman Hospitality Properties, said it’s particularly difficult to staff the large resort and convention center properties his company is known for.
“Frankly, this is one of the big challenges of today, especially in markets like (Nashville),” he said.
He said his company has also felt pain from low unemployment in markets such as Orlando, where there’s significant competition from other operators.
“We’re competing with Disney (which recently increased to a $15-an-hour minimum wage),” he said.
“We said this in our second-quarter announcement that we have to incur $3 million to $4 million in pay increases. In a 3% unemployment environment, which the U.S. really is today, there is going to be more and more pressure on our industry because we’ve got to service the customer,” Reed said.*
Amanda Hite, president and CEO of STR (Hotel News Now’s parent company), noted the cost of “labor has been outpacing rate for several years now.” She said this is felt most acutely in high growth markets.
She added the markets hardest hit are not always what might be expected. One client, she said, challenged her to name the market where the highest increase of labor expense had occurred. “The obvious guesses are New York or San Francisco, but he said it was Nashville,” she said.
Reed noted that market in particular is seeing the number of job openings grow at twice the rate of the local population. Markets like that have to be increasingly focused on drawing more people to live in the area, he said.
“We’ve got to create affordable housing and allow people to live in Davidson Country (where Nashville is located),” he said. “We have to improve schools so people can put their kids in schools that are pretty good. These are things we take a lot of interest in because they affect the way we deliver service to our customers.”
Deitemeyer said the war for talent can’t just be won by increasing pay constantly, and hotel companies now must put an increasing focus on workplace culture to retain their employees.
“In my experience and what we see, people leave because of bad leaders,” he said. “So we’re investing heavily (in leadership development). Are there people who leave for 50 cents an hour? Of course. But if you have an understanding of what they need to feel nurtured and successful and you’re developing the right leadership competencies, you can mitigate some of that.”
At a corporate level, his company has taken on more quality-of-life initiatives for employees to create a more enriching workplace.
Reed said there’s been a noticeable shift in what his company’s employees expect out of the workplace.
“It’s interesting how (what employees want out of a workplace) is changing,” he said. “Health and wellness is very important to millennials, as is financial planning. They want a company with good pay and benefits but also to be immersed in the culture and … (to) feel loved and cared for.”
Deitemeyer said his company has been focused on finding ways to make Interstate’s offices a fun place for employees to be.
“We think about programming for our corporate office in the same way we think about programming for a resort,” he said, noting his company offers things like a mojito day and queso (Spanish for cheese) Wednesdays.
“It’s about bringing energy and enthusiasm to the space,” he said. “It’s about inclusion and fun. We work hard, and we play hard.”
*Correction, 22 August 2019: This story has been updated to remove a portion of a quote that included an erroneous figure.