When the pandemic started, travel stopped. Without tourists, hotels, gift shops and restaurants in all destinations across the United States have struggled to stay in business. Without customers, employees were laid off. Leisure and hospitality jobs represented 34% of all pandemic-related job lossesthe highest percentage of any US industry.
After two years of social distancing and working from home — and some derailed reopenings because of the delta and omicron variants — many Americans are ready to travel again.
As a result, hospitality workers are in high demand. The service-sector labor market, which tended to favor employers, now gives workers leverage to negotiate better wages and benefits.
To understand this phenomenon, we need to take a closer look at supply and demand in the travel and hospitality industries.
“There is a vicious circle theory of tourism and we’re in that cycle right now,” said Maggie Daniels, professor of tourism and event management at George Mason University.
The cycle is driven by a mismatch between supply and demand, which overwhelms businesses and leads to diminished experiences for customers and workers.
On the demand side, “people have been delaying vacations, they’ve been delaying family events for two years, and they’re just ready to let loose,” Daniels said.
There is so much pent-up demand that popular tourist destinations are overwhelmed. To take National parks. “There is a load capacity problem, which has been greatly exceeded, and the parks are scrambling. They’re underfunded, they’re understaffed,” Daniels said.
For visitors, this means crowds, queues, higher prices and a lot of frustration. Which brings us to the supply side, where frontline workers bear the brunt of customer dissatisfaction.
Many of them have left the industry. The non-profit US Travel Association reports that employment in leisure and hospitality is down 8% from pre-pandemic levelswith 1.8 million vacancies to be filled in December 2021.
But according to Larry Yu, professor of hospitality management at George Washington University, in some ways now is a good time to work in the hospitality industry.
“The pandemic has really made the industry aware that what we call human resources, and now we use the term ‘talent,’ is even more business critical,” he said.
Companies started offering better wages and benefits. “Hospitality is one of the sectors with the highest increase in salary increase,” Yu pointed out.
This can be a challenge for small businesses, and some of them are getting creative.
In the small town of Copper Harbor, Michigan, Don and Peg Kauppi own The Mariner North, a restaurant and lodge. The majority of their customers are tourists who visit the area for outdoor recreation such as mountain biking and snowmobiling.
The Kauppis have about 10 year-round employees, a number that rises to 40 during the busy summer and winter seasons. Hiring is a challenge.
“In fact, it has become more and more difficult in recent years. This industry doesn’t have a lot of contract jobs that provide year-round comfort and perks,” said Peg Kauppi.
In addition to industry-wide labor shortages caused by the pandemic, Copper Harbor has its own unique geographic challenges.
“There are transport problems. We are 35 miles from what you might call a small town,” Kauppi explained.
On top of that: “Affordable housing is non-existent in Copper Harbor,” she said. “With the increase in tourism and outdoor recreation business, we find that we need more staff, but there is no accommodation for them.”
The Kauppis provide accommodation for some of their workers and also help with transportation, lending summer staff members bicycles to help them get around town.
In Bar Harbor, Maine, a coastal town just outside of Acadia National Park, Christian Cuff co-owns a seasonal farm-to-table restaurant, Sweet Peas Café. Cuff says restaurants are feeling the pressure to offer better wages and benefits.
“I feel like there’s a bit of a coming to God right now in the restaurant industry, like, we have to find a way to do health care, we have to find a way to provide benefits, paid time off, real hourly wages that allow people to live above the poverty line,” he said.
It’s not a new problem for the restaurant industry, Cuff said, but the pandemic has made it a focal point.
“The pandemic, more than anything else, set people’s priorities and they said, ‘Look, if I have to re-examine my daily life, here’s what I need, here’s what I want, and here’s what I am ready to negotiate.
Even before the pandemic, Cuff offered paid time off and weekly bonuses to help offset employee healthcare expenses. He sees other restaurants catching up.
“We thought we were ahead of the game and we realize no, we are level with what everyone is going to have to do. So, it’s hard but it’s exciting. It’s like you’re riding a wave, you think you’re on top but you see the big boy behind you,” he said.
Sweet Peas Café is fully staffed and, according to Cuff, ready for the busy summer season. But George Mason University’s Maggie Daniels expressed concern that many businesses, workers and travelers have left for a chaotic summer vacation.
“From the perspective of many business owners, they’ll be happy to see people coming back. I believe the outlook is very positive in terms of revenue generation,” she said. She is concerned about human resources and the ability of companies to attract and retain employees.
“These organizations are really going to have to step up their efforts. They’re going to have to make those experiences meaningful for their employees,” Daniels said. “They’re going to have to protect them and put safeguards in place to ensure their well-being and personal happiness.”
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