While the hospitality industry has experienced workforce recovery following the pandemic, regulatory and economic challenges continue to limit growth, according to American Hotel & Lodging Association President and CEO Rosanna Maietta, who testified before the U.S. House of Representatives Committee on Education and Workforce on Wednesday.
Hotel industry employment is nearly 10% below pre-pandemic levels, despite average hotel wages having increased more than 15% faster than average wages throughout the general economy, Maietta said in her testimony. She added that the hotel industry continues to face “economic pressures from inflation, workforce shortages and overregulation.”
In her testimony, Maietta urged Congress to pass the Save Local Business Act and expand the H-2B seasonal guest worker program to combat ongoing owner hurdles like persistent labor shortages.
Industry challenges persist
The hospitality industry plays a critical role in the prosperity of communities across the U.S., though its growth is negatively impacted by inflation and overregulation, Maietta said in her testimony.
As a “vital part of the American economy,” U.S. hotels support roughly one in every 25 jobs nationwide and generate more than $83 billion in tax revenue at the federal, state and local levels, Maietta detailed in her testimony. Franchised hotels, specifically, support more than 2.8 million jobs and generate nearly $100 billion in economic impact annually, she said.
Industrywide, though, “labor shortages remain a key challenge” and contribute to inflationary pressures on employers and consumers, Maietta said. Despite hotels offering record wages last year, more than 200,000 positions still need to be filled across the industry, she noted.
In addition to inflation concerns, the hotel industry is “facing regulatory challenges that could exacerbate staffing issues,” Maietta added. “Hotels have recently faced aggressive overregulation by the federal government, particularly focused on the franchise business model.”
Call to Congress
The National Labor Relations Board’s attempt to change the legal standard for joint employer liability, for example, posed a significant threat to the franchise model, per Maietta.
While this legislation was overturned by the House of Representatives and the Senate in 2024, AHLA continues to “urge Congress to codify the traditional joint employer standard into statute by passing the ‘Save Local Business Act,’” Maietta testified.
The act would make it so a person could be considered a joint employer only if they directly exercise “significant control over the essential terms and conditions of employment,” per documentation from Congress.
In her testimony, Maietta also urged Congress to expand the H-2B program, which allows employers to hire temporary nonimmigrant workers for seasonal, intermittent or peak-load employment.
The expansion of this program would ease workforce shortages at the many hotels that operate in areas where demand for accommodations fluctuates significantly based on the seasons, such as hotels in ski areas in the winter or hotels in coastal and lake regions in the summer, Maietta said.
“Despite efforts to attract American workers through higher wages, increased flexibility, and expanded benefits, gaps remain, especially in locations that depend heavily on seasonal tourism,” she added.
Beyond workforce concerns, the hotel industry’s growth and long-term stability “are closely tied to the extension of the Tax Cuts and Jobs Act,” Maietta explained. Tax provisions from the legislation “have been crucial in supporting job creation, driving economic growth, and ensuring that businesses — especially small businesses — remain competitive.”
