Study: Accommodation Wages Rising Amid Worker Shortage

Wages in 2021 rose in the accommodation sector while employment figures declined, and the gap between the two is larger than in any other surveyed industry, according to an analysis published by Lending Tree.

The company in its MagnifyMoney Study analyzed the latest U.S. Bureau of Labor Statistics’ Quarterly Census of Employment and Wages and discovered that the accommodation sector is where average weekly wages grew the fastest relative to employment growth, increasing from $629 in the first and second quarters of 2020 to $700 in the first and second quarters of 2021, an 11.2 percent hike.

But employment declined 11.3 percent from the first and second quarters of 2020 to the third and fourth quarters of 2021. The difference in the wage and employment percentage-point changes is 22.5, creating, according to the study, “a mismatch between the supply of and demand for workers in the industry, combined with the willingness of some employers to take somewhat desperate measures to stay afloat, has caused wages for accommodation workers to rise significantly.”

The Hits Keep Coming

In September 2021, 6.6 percent what BLS defines as the accommodation and food services sector workforce were quitting at the highest rate of any industry. This included frontline workers like housecleaners and waitstaff, whose past earning power had been tied to gratuities.

Higher wages and compensation for these and other workers are a part of the supply-and-demand challenges that the industry faces and could translate to higher rates for corporate customers.

Travel buyers who have seen hoteliers’ challenges reflected in higher room rates can expect more of the same. Last month, STR and Tourism Economics increased their projected 2022 U.S. average daily date from $130 to $134. STR SVP of consulting Carter Wilson in a statement said, “Terms of recovery are not playing out evenly across the board, and many hoteliers have had to raise rates to minimize the bottom‐line hit from labor and supply shortages.”

For the accommodation segment, increasing wages and compensation appears to be the short-term solution as the industry struggles to find its new normal.

Terri Hardin  www.businesstravelnews.com