Dive Brief:
- U.S. hotels are projected to pay employees a record $123 billion in wages, salaries and other compensations in 2024, up 4% from 2023 and 20% from 2019, according to the American Hotel & Lodging Association’s 2024 State of the Hotel Industry report.
- The forecasted increase comes after the national average hotel wage reached an all-time high of more than $23 per hour in 2023, the report details. Hoteliers have offered higher wages in an effort to recoup labor losses brought on by the pandemic.
- In 2024, hotels will continue to gain workers, though not enough for the industry to reach pre-pandemic levels, according to the report. And inflationary pressures will continue throughout the year — impacting the spending power of those record wages, as well as hotels' bottom lines.
Dive Insight:
Hotels are projected to employ nearly 45,000 employees this year, bringing the industry’s total workforce to approximately 2.14 million people, the report detailed. However, this number remains nearly 225,000 workers short of the 2.37 million employed in 2019.
Staffing shortages continue to be felt across the industry, with nearly 68% of hoteliers in a January survey by AHLA reporting they remain understaffed. This is less than in June, though, when 82% of hoteliers reported experiencing a staffing shortage, 26% severely so — to the point the shortage was impacting the hotel’s ability to operate.
The record wages expected to be paid in 2024 “point to a strong future” for the industry, AHLA President and CEO Chip Rogers said in a statement.
However, the forecasted increase is less robust than in previous years when evaluating it in terms of average pay per hotel employee.
In 2023, hotels paid 2.1 million employees some $118.01 billion in wages, salaries and other compensation, the report said. This equals an average of $56,195 per employee.
In 2024, based on the forecasted labor and pay gains, the average pay per employee will increase 2.6% year over year to $57,682. That is less than the boost hotel employees saw from 2022 to 2023, when the average pay per employee rose 6.8% year over year. And even with that increase, hotel workers across the country claimed their pay did not keep up with the rising cost of living in 2023.
In July, thousands of union hotel employees in Southern California went on strike. Similarly in October, unionized hotel workers in Detroit walked off the job, advocating for higher pay.
Hotel workers with the Culinary Union in Las Vegas voted to authorize a strike in September. However, what could have been the largest strike in the city’s history was averted after workers at Wynn, MGM Resorts International and Caesars Entertainment negotiated contracts before their strike deadlines.
Most recently, the Culinary Union announced nearly 700 workers reached a tentative agreement on a five-year contract with Circus Circus Hotel & Casino Las Vegas.
According to AHLA’s report, high-level inflation will continue to impact the hotel industry in 2024 in key areas like food and beverage, where prices will remain elevated through mid-year. Prices will similarly remain elevated for all raw materials within the disposables category. And the amenities category could also be impacted by “negative geopolitical and global economic conditions,” the report said.
