This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

December 2, 2015

Labor Shortages in Travel

Except from areas affected by economic downturns or terrorism, we hear that labor shortages in travel and hospitality are creating challenges for employers and and driving up salaries.

Travel salaries are up in the UK
According to the United Kingdom recruitment firm C&M, travel salaries for jobs paying up to 40K reached their highest point for three years in October. Overall, the salaries for new travel jobs were up by 0.5 percent in September and in five of the last six months. Wages are now rising across the vast majority of the industry.

China's booming hospitality industry
The hospitality industry in China is booming. Their construction of new hotels is rivaled only by that of Panama*. Many hoteliers are expanding in China, but their challenge is that the colleges and universities training hospitality workers are is simply not turning out enough graduates to fill the fast-growing demand. To meet their demand, the InterContinental Hotels Group (IHG) has established 23 academies to train their staffs and to deliver the 86,000 employees needed in the next three years.

Australia's hotel industry has serious competition
Elsewhere in the Asia-Pacific region, in Australia, the hospitality and tourism industry has suffered from the impacts of the mining boom in drawing qualified workers away. According to the Australian Hotels Association, "the labour shortages in the hospitality and tourism industries [are] likely to continue for the foreseeable future".

Their National Resources Sector Employment Taskforce recently highlighted the need to secure more than 70,000 additional skilled workers for major resources projects over the next five years. One study found that 50 percent of tourism and hospitality employers "identified competition for labor with other sectors as the third most important factor" to have an impact on employee retention.

The United States is having problems, too!
According to data from the United States Bureau of Labor Statistics (BLS), between 2012 and 2022, the broad leisure and hospitality industry will need to find an additional 1.3 million workers. Some occupations within the hotel business are forecast to have even greater growth. By 2022, the BLS expects the number of housekeeper jobs to increase 183,400, a jump of 12.8 percent, and the number of front desk jobs will rise by 13.7 percent.

We see a rosy future for the hospitality industry---if it can find or grow the people it needs to serve its guests. Expect more institutes and academies like IHG and Holland America, the cruise line, which for years has had two locations in Southeast Asia to train their staff. "Growing your own" has long been one of the best ways to respond to labor shortages like the one China is facing. IHG's response will be copied in other industries. For most hoteliers, finding and keeping good, qualified, experienced people will be the most challenging situations they will face in the near-term future.

* Stay tuned for a report about Panama, the booming vacation spot, destined to be the new "in" place to visit.

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