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THE HOTEL STAFF COMPENSATION CHALLENGE


The October 12, 2022 online issue of HNN published an article by HNN columnist Scott Antel, who is a lawyer specializing in hotels and hospitality services. Antel’s article was highly critical of the hotel industry’s history and practice of providing subpar compensation to front line workers. Those workers include the front desk staff, housekeeping, F&B Staffers, Bellhops and maintenance team members, and in general the people who actually do the work of taking care of the guests. You know, the people who coincidentally (?) provide the revenue that keeps the hotel in business!


Not to make excuses for the hotel industry in this regard, but I have always observed that most “meet the public” businesses that have brick and mortar sites tend to provide the lowest compensation to the people who encounter the public first, the front liners in other words.


Think for a moment about the fact these team players are ultimately responsible for the first impression a guest notices about that property. Most of the time it is the only impression!....and in the hospitality industry “word of mouth” travels quickly. Too frequently, their day job pays them too little to survive, hence, ownership encounters high turnover rates resulting in additional hiring and more training .


Antel does an excellent job of describing this situation. It was not necessary for him to present any specific suggestions for a solution, because his solid portrayal illustrates what the resolutions are for these common practices. And as Antel correctly states, it is cultural. Nature teaches us that meaningful changes to cultural homeostasis might be the greatest challenge humans face, in any category.


The most innovative lodging businesses are boutique branded, one of a kind, hotels. They have no desire to scale up their concept. They celebrate and are celebrated for their uniqueness. And they are frequently family owned and operated which often eliminates the compensation challenge because they share their success generously with all family and team members.


In recent years, the big guys in the industry have noticed that many travelers are discovering these charming lodging options and prefer them to the cookie cutter franchise chains. The technology advances and improvements in the lodging industry have made it easier to find these unique locations. One consequence has been for the big chains to add faux boutique concepts to their portfolio (called soft brands). But savvy travelers are not fooled by the in authenticity of this maneuver simply because the lobby looks a bit different.


Collectively speaking, the companies who are the largest source of low-paying American jobs have business models that require them to seek the lowest common denominator and try to commoditize their entire enterprise. Low staffing prices, on a foundation of low cost upgrades, is sacred in American business. The large-scale branded hospitality sector survives in this mode of what I call “Dye The Carpets, and Raise The Rates” mentality. This practice also includes quick service and fine dining restaurants, and brick and mortar retail chains across the country.


This business model exists on the shaky foundation of below poverty level compensation for a high percentage of the workers. Those workers can actually be a net negative on the economy as a whole because they do not have discretionary income with which to participate as a consumer. And the American economy is still primarily consumer driven. To survive, these below poverty line workers must apply for social support services such as rent and food subsidies, requiring taxpayer support.


Are there practical solutions to the present struggles by hotels to find and hire front line staff? I will offer some suggestions here that hopefully attract some discussion, maybe even some push back, to open-up and explore opportunities for improvement.


First, be the hotel in your market area that pays two to three dollars per hour more than the local standard for the front line and support roles in your business. Examine your rates closely to determine if you can adjust them to absorb the increase in operating cost. Even if you may not be able to recover the cost that way, there are ways you can still come out ahead. You will get a reputation as a better place to work, because a two dollars per hour increase for a 40 hour week improves the employee’s compensation by $320 per month. That might be their entire grocery bill. Word will spread throughout the hospitality worker population in your market that you are the best place to work. This will provide you with cream of the crop selection. And the big advantage is your staff will be more likely to show up for work, on time every day, and your turnover will drop dramatically. Turnover and retraining are some of your biggest expenses.


Second, get or do an audit of your technology package. This includes not only your property management software, which of course is the nucleus of your operation tools, but also your website functionality, booking engine, ancillary items such as key systems and ISP services. Are there any weak links that can cause confusion or disruption with the team members who rely on technology to perform their assigned tasks? Does the PMS software require a lot of training? Do you have state of the art tools that are precisely fitted to your property type? The idea that “one size fits all” does not play well with mission critical systems. And there finally are some technology options that can be tailored to specific operational needs at a much lower cost.


Third, do you have an effective means of collecting employee satisfaction feedback? There is technology available (www.tapyness.com/hospitality appears to be the gold standard) for collecting feedback anonymously that can be trusted to reveal how team members feel about all aspects of their work experience. Caring about how team members feel leads to better caring about how guests feel. And the same technology can acquire important feedback from the guests as well. Tapyness has proven to be a desirable replacement for the widely hated and unwelcome traditional survey emails that are falling out of public favor.


Finally, customer relationship training can be subtle, but extremely vital as a necessity. I have asked hotel managers what their process is for training their team members to make guests feel special and well served. I have been surprised at how vague the answers often were. It was almost as if it were an afterthought. Every single team member, meaning if they get a paycheck of any kind, should be carefully schooled in the art of being an ambassador for the hotel. Because one way or the other, they already are. If they come into contact with any guest at any time for any reason, they are presented with an opportunity to make the guest feel important. Can you give them authority to grant a request from the guest? It may be routine, or it may be profound. But whatever it might be, it will make an impression on the guest that they will remember(good or bad).


Compensating everyone on the team well enough that they do not feel disrespected is certainly good business. But creating a work environment that makes those team members feel important, empowered, and valuable is just as important as the size of the paycheck. The future of building a better population of hospitality professionals depends on it.

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