Business is rebounding quickly across the country at hotels, restaurants and airlines, but millions of employees have been left behind as companies seek to lock in pandemic changes to their models and slash labor costs in the future.
For a year, hotels, airlines, casinos and restaurants – at least those that remained in business – have made do with far fewer workers, often well under half of the number they employed before the pandemic. Customers have adjusted, with hotel guests checking themselves in on mobile apps and restaurant patrons content with picking up takeout.
Employment has begun to recover, with 13.8 million people employed in leisure and hospitality jobs this March, according to the Bureau of Labor Statistics. That’s up from 8.7 million last April after mass layoffs took place.
But that’s still 3 million jobs short of where the industry was before the pandemic, and it remains to be seen how many of the industry’s still out-of-work employees will get a call back with business and international travel to the United States still nearly nonexistent. And some large employers are signaling they plan to make do with fewer employees as they experiment with new business models that allow them to cut labor costs.
Hilton’s chief executive said recently that he’s focused on reducing labor costs at the chain’s 6,400 hotels.
“The work we’re doing right now in every one of our brands is about making them higher-margin businesses and creating more labor efficiencies,” Hilton chief executive Chris Nassetta told investors in February. “When we get out of the crisis, those businesses will be higher-margin and require less labor than they did pre-COVID.”
The world’s largest hotel chain, Marriott, is testing “contactless arrival kiosks” at hotels in New York, Louisiana and Miami, along with colossal vending machines to replace convenience stores.
Only time will tell what long-term effect such changes will have on jobs. Hilton spokesman Nigel Glennie said that “the one thing we know for sure is that Hilton is a business of people serving people.” Marriott spokeswoman Connie Kim said the company’s kiosks “will not impact staffing levels.”
“The new technology provides flexibility for guests who prefer to stay contact-lite, while maintaining the option to be serviced by a hotel associate one-on-one if needed,” she said.
How many of these changes will become widespread is unclear. What’s certain is that the $1 trillion tourism and travel industry, which was among the hardest hit of all sectors of the U.S. economy, is now seeing growth as housebound travelers, flush with savings, reemerge.
During the first week of April, more than 10 million travelers passed through security at American airports, 12 times the number during the same week last year, according to the Transportation Security Administration.
People are heading south in particular, where they are finding warm weather and less restrictive health protocols. Among the top 25 U.S. markets, hotels that are open in Tampa (82 percent) and Phoenix (77 percent) reported the highest March occupancy levels. The lowest were