Fed up and moving on, hospitality industry survey sheds light on April job numbers

After a lengthy career in the hospitality industry Peter Ricci thought he’d seen everything - from the 1973 oil crisis to upheaval in tax laws, the 2001 terror attacks and the great recession a decade ago.

But that didn’t prepare him for the current dislocation in the labor market, with employers struggling to find available workers as the economy rebounds from the devastating effects of the covid-19 pandemic. “I've been in this business my entire life, and along the way, we've always had crises, we've always had labor shortages, because we've historically been known as an industry that has low pay and long hours,” said Ricci, who is director of the Hospitality and Tourism Management program at Florida Atlantic University (FAU). “But this is unprecedented,” he added.

Ricci got a surprising insight into the scale of the problem when he decided to undertake a survey of hospitality industry workers using FAU’s extensive network of students, workers and employers. He was shocked by the results.

"Roughly 70% of the more than 4,000 respondents felt covid-19 would have a negative long-term impact on the industry, while 65% said they felt the industry failed to protect its employees as well as other sectors," according to FAU. "Respondents said employers were too quick to fire or furlough them and that employers cared more about stock value than the workers themselves," it added.

More than one-third said they planned to look for alternative jobs in other industries, while entry-level workers were especially disenchanted and looking to switch careers, the poll showed.

“The results of this poll clearly indicate that employees now are fed up and are looking at moving on to other industries. That’s a huge concern,” said Ricci, a former hotel manager who began his career washing dishes. “The industry... needs a full overhaul in its staffing levels, pay rates and employee treatment,” added Ricci.

3.1 million jobs

The implications for the hotel and restaurant industry cannot be understated. In Florida alone, hospitality and tourism is a $111.7 billion annual business with about 1.5 million employees.

A poll conducted by the American Hotel and Lodging Association found that the pandemic had wiped out 10 years of hotel job growth. Leisure and hospitality has lost 3.1 million jobs during the pandemic that have yet to return, representing more than a third of all unemployed persons in the United States, according to the Bureau of Labor Statistics. The unemployment rate in the accommodation sector specifically remains 330% higher than the rest of the economy.

“A lot of people just aren’t coming back,” said Chris Heath, executive chef at Biltmore Farms, Founded by the famed Vanderbilt family deep in the Blue Ridge mountains of North Carolina.

And that’s even with new incentives such as competitive pay and benefits.

Loyalty and culture

Heath left his previous job last year as head chef with a major corporate hotel chain in South Florida after he was put on a three-day week as staffing was slimmed down at the height of the pandemic. It wasn’t an easy decision as he’d been with the hotel chain for almost 10 years. “I was extremely immersed in the brand. I believed in the culture,” he said.

“I understood it was them trying to mitigate their losses,” he added, but he couldn’t make ends meet on three days salary with the high cost of living in South Florida.

Despite taking a substantial pay cut, he has no regrets about moving to North Carolina with his wife and three small children. “It’s night and day. Biltmore Farms has been here for their entirety. It’s loyalty to the local market. It’s more family oriented,” he said. The motto on the Biltmore Farms website is: ‘An inspiring sense of place doesn’t happen on its own. You have to cultivate it.’

And, his salary goes further than it did in South Florida, thanks to lower rent and cost of living. Biltmore Farms pays 80% of his family’s insurance , unlike his previous corporate employer.

The shortage of workers could take a while to reverse. U.S. colleges and universities can expect a one- or two-year decline in hospitality and tourism enrollment, Ricci says. “These programs are the largest pipeline of future workers for the hospitality and tourism industry in America,” he added.

Ricci posts 500 to 1,000 entry-level to senior-management job openings a week. He said employers are desperate to attract talent, with some offering $500 g bonuses for new employees as well as fast-track promotion opportunities.

Ricci’s idea for the survey came almost by accident and in response to what he saw happening in his own department at FAU. In March 2020, as covid-19 was starting push employees out of work, FAU decided to help hospitality workers continue their education by offering a free hospitality and tourism management certificate, which normally costs $900. The university, which only has 30,000 students, was stunned when 77,000 people worldwide ed for the certificate.

The university normally has 50 to 100 people for the certificate each summer, but word spread like wildfire on social media, especially on Linkedin.

Biterness and betrayal

“I started getting between 1,000 and 5,000 emails a day at the height of this. People were sharing with me their comments of how they felt about their employer, about covid, about being furloughed for the first time in their life,” said Ricci. “And then as we moved into June and July and they started to get laid off, they were sharing those comments, bitterness, betrayal, feeling lost and alone and so on and so on and so on. And when I say sharing comments, I mean thousands of them, not like a handful,” he added.

It’s now consumed his work, and even led to him rewriting his job assignment and doing a weekly Podcast, No Vacancy News.

As the pandemic began to recede and the economy got closer to reopening, Ricci realized there would be dire consequences. Hospitality workers usually work such long hours they enjoy little time to relax, spend time with family and contemplate life. “They had time to reflect during that hiatus and many of them decided this is not what they want to do for their life,” he said.

One employee after another wrote to him describing how they felt “screwed” after lengthy service to major hotel chains. One couple described working for one of the luxury brand hotels for 31 years, before being terminated on the same day, without warning, via an impersonal email.

"Blood, sweat and tears"

“Our blood, sweat, and tears has gone to the organization and its guests for three decades. Believe me, having the skill set of outstanding communicators and empathetic listeners, we will both be leaving the hospitality industry for other areas and not looking back,” they wrote.

“This pandemic caused the ‘true colors’ of the hospitality leaders to come through. Not care, concern, and empathy - but greed, overwork for their associates, and a lack of respect. We have been betrayed,” they added.

In the process, Ricci says, they looked around and found other jobs that paid better, working as drivers for Uber or Lyft, or in other types of customer service, marketing jobs, and call centers. “They found, ‘hey, I can have better work life balance outside of hospitality,’” he said.

When Ricci began warning employers they might have a problem, he discovered “about half of them have their head in the sand and just said; ‘Absolutely not. Everybody can't wait to come back to work.’”

Ricci has heard from a number of human resources directors who say they have already raised pay, added more flexible schedules, hiring bonuses, free uniforms, free meals etc. While they are still struggling, they are doing better than others, he said.

One country club manager wrote; “We, like so many others, we are offering all the usual … incentive/performance payments, free everything, employee appreciation programs, referral bonuses, creative recruiting efforts, internships, and so much more with very little success.”

Another compared what they were doing to other employers in their vicinity. “One continually seems to bashing the former workers yet has not raised their front desk agent staff above $15.00 in 2 years,” they wrote.

April jobs report

Now, the truth is beginning to sink in, especially after the last U.S Department of Labor jobs report in April which came in 75% below expectation.

Ricci now spends part of his days posting jobs for FAU alumni and students. “I do it out of the labor of love. And I have never posted this many jobs in my entire 20 years in academia,” he said.

His email database includes about 1,600 employers and almost 50,000 students and employees globally. “So, I'm able to spread the word on these positions to all levels of associates from brand new student entry level all the way up to owner-operator, vice president,” he said.

Because the hospitality school offers courses in business istration, finance and ing, he says many graduates are qualified for a host of better paid service jobs outside of hospitality, such as insurance, sales, banking and the big stores like Amazon, Walmart and Target.

"There is a fix"

One thing that stood out to Ricci in the survey was that the one third of respondent who remained loyal to the industry were mostly managerial and supervisory level employees. But the more junior employees were the ones ready to look outside the industry.

Ricci has already been discussing the findings with major hotel chains. “I want some of the leading brands that I ire to take these findings from all these people and do something about it, because quite honestly, there is a fix,” he said.

“We need to rework our staffing levels back a little bit and give people more work life balance so we compete better with other industries. We need to pay slightly better at the entry level,” he said.

It also made economic sense for owners to be more generous when they are currently paying large amounts in overtime to make up for the lack of workers, he pointed out.

“There really is a way to do it without greatly impacting the margins," he said.