In reflecting on the panel discussion held at the Arab Travel Market in Dubai several months ago, where leaders from Accor, Emaar, Radisson, and a prominent recruiting company convened, I couldn’t help but consider the imminent talent crunch that looms over the Middle East hospitality industry. An article in a Middle East hospitality magazine piqued my interest, prompting me to delve deeper into the reasons underlying the staffing challenges.
While the scarcity of service and housekeeping staff may be a valid concern, trusted sources assure me that the current supply suffices for the present moment. However, these sources express an alarming shift in employees’ quality and tolerance levels in recent years. This sentiment echoes the observations of a prominent headhunter, who aptly refers to a growing trend known as ‘The Big Quit.’ This trend, extending beyond a single industry and infiltrating all sectors, including hospitality, is a consequence of the pandemic’s profound impact on individuals at managerial levels. Seizing this opportunity for introspection, young professionals depart from their current roles in significant numbers. They yearn for better prospects that align with their values and personalities and offer greater avenues for personal and professional growth.”
“As a seasoned international hotelier and former C.E.O., I hold firm in my conviction that employees represent the most valuable asset of any hotel company. However, the stark reality we face is a staffing crisis in the hospitality industry, placing the onus squarely on the shoulders of Human Resources. It is no secret that our industry calls for innovative approaches to address this pressing problem effectively.”
“Moreover, the question of competence arises, leaving one perplexed by the predictions of Middle East hospitality industry leaders regarding an impending talent crunch from Europe. The absence of concrete reasons supporting these predictions implies a limited consideration of this matter. While the scarcity of service and housekeeping staff may hold some truth, my sources attest that the current supply adequately meets the existing demand. Nonetheless, an alarming decline in employees’ quality and tolerance levels has become increasingly apparent.”
“It is no surprise that the industry grapples with staffing challenges, particularly following the widespread layoffs initiated by hotel companies. The repercussions of these actions have left numerous individuals stranded at airports, awaiting their long-overdue salaries. Across Europe, especially in the U.K.U.K. and Germany, skilled professionals no longer find low wages, traditional management mentalities, and unacceptable working conditions acceptable for their careers and personal growth.”
It is an undeniable fact that the hotel industry in Germany currently has approximately 170,000 vacant positions, while the U.K. faces a staggering 200,000 vacancies. Politicians promise to help through easing immigration for specialist workers without visible results and those traditionally weak trade associations like DEHOGA in Germany cannot do much against static and outdated bureaucratic controls in the regions.
“Some businesses’ sudden surprise is seen as hypocritical by the trade unionist Zeitler, as the personnel shortage is partly a result of their own actions: “Rather than offering attractive pay to retain skilled workers, they opted for tariff evasion, mini-jobs, and precarious employment.” Zeitler highlights the high number of apprentice dropouts in the culinary field. In contrast, other industries offer better earning prospects and greater appreciation, leading many who were forced to leave during the pandemic to stay away from the hospitality industry in the future.”
While the Middle East’s hospitality sector may encounter staffing challenges in the future, a practical approach to prepare for this lies in critically examining how employees are treated and compensated, particularly considering the prevailing economic climate. Hotel companies must reevaluate their salary structures, prioritizing the well-being of their employees over shareholder dividends, especially in the U.A.E., Qatar, and K.S.A. These regions experience higher living costs and room-restaurant prices than the international average. Thus, the remuneration for line-level staff should be significantly higher. Would you consider working as a waiter in the U.A.E. for a mere 2,700 AED (approximately $500)? While this compensation may entice individuals from South Asia or Africa, it is a discouraging prospect for Europeans or Americans, who are notably absent from the lower-paid positions in the Middle East anyway.
Similarly, the same predicament extends to hotel management roles in Europe. Numerous companies offer meager salaries to their managers, targeting ambitious young hoteliers fresh out of school. Consider the following example of an advertising for a General Manager position: “In addition to further training and career opportunities, we offer an annual gross salary starting from €57,000 (14 times per year, based on an ‘all-in’ basis). The actual salary will, of course, be determined based on your qualifications and experience. Additionally, you will receive an annual performance-related bonus of up to 1.5 monthly salaries per year.”
After taxes, this amounts to approximately €2,600 per month. The promised performance bonus of 1.5 monthly salaries becomes an elusive dream. Such a salary package is wholly unacceptable for a General Manager position. Only younger professionals might be enticed by such an offer and in the process miss out on much better career prospects.
As a career advisor and mentor for aspiring hoteliers, I must emphatically state: Do not even consider it. If you aspire to reach the pinnacle of your career, you must do so with diligence and prudence. Do not chase a mere title. In this case, the offered salary is unacceptable, even for a young manager. At least this company provides some transparency by mentioning its readiness to negotiate, potentially enticing individuals solely motivated by monetary compensation. Regrettably, many other companies, even top international organizations, fail to do the same. Considering their influential position and the value they add to a candidate’s resume, they should lead the way and set the standard for remuneration, as exemplified during Horst Schulze’s tenure as the C.E.O. of Ritz Carlton Hotels. Unfortunately, since the responsibility rests with H.R.H.R. departments and administrators, I foresee no end to the “self-inflicted” labor shortage in the hotel industry.
We find ourselves in an extraordinary era of history, where change is unfolding at an unprecedented pace. Hotel companies are racing to establish new brands in response to the evolving preferences of their discerning clientele. However, let’s be candid. The hotel industry, by nature, tends to be conservative and sluggish in its movements. Rather than pioneering new and exhilarating trends, they often trail behind, cautiously following the shifting currents of social development.
They may proclaim vegetables as the “New Meat” or launch sustainable F&B initiatives like “Green Ramadan.” While these endeavors have merit, young and ambitious hoteliers are primarily swayed by financial considerations, and I, too, understand this reality.
If companies compromise their most valuable asset to appease shareholders, they ultimately fail to serve their interests. I hold shares in two hotel companies and closely monitor their long-term performance. Astonishingly, despite or perhaps because of the staffing crisis, leading hospitality companies have witnessed significant growth in their stock prices since the onset of the pandemic. For instance, Hilton Hotels’ shares are now valued at $142.63, compared to a pre-COVID-19 price of $68 in 2019.
Similarly, Marriott experienced a low of $59.08 in 2020 but currently stands at $175. These figures illustrate that investors hold unwavering faith in these companies. Allow me to emphasize this: Hilton and Marriott are undoubtedly generating remarkable returns for shareholders and likely benefiting a considerable portion of their global workforce. However, they must catch up to attract fresh, top-tier talent. Brands of such caliber should never experience labor shortages. And if they do, it is a situation they have brought upon themselves.They should focus their brand-building and image management not only towards clients but also towards their present and future workforce.
The time has come for the global hotel industry to thoroughly evaluate the real-time needs of their employees and address the staffing crisis by meticulously examining how they can incentivise and attract exceptional talent. Once again, money talks. Modern and young hoteliers are no longer easily swayed by sustainability and diversity rhetoric. Companies must exhibit more audacity to allure and retain top talent. To achieve this, hotel companies must embark on a more radical approach. Initially, they must reassess their salary structures, ensuring they are competitive. Furthermore, as the new generation joins their ranks, individualized strategies will become necessary, recognizing that each individual harbors distinct visions of a prosperous future. Only through a bottom-up mentality, departing from the prevailing top-down mindset, can the industry triumph and flourish in the long run.
I understand that many readers may vehemently object to this viewpoint. They may argue that money is not the sole motivator, and I concur. However, I firmly believe that money holds unparalleled sway. This conviction is rooted in four decades of firsthand experience working with esteemed companies across the globe.
The resolution to staff shortages often presents itself in simple and straightforward solutions. I have witnessed numerous instances where hotels worldwide have ingeniously tackled this challenge. Allow me to illustrate with an example. During the city-wide hotel strike in New York City, I worked at the Waldorf Astoria. In response to the dire circumstances, the Waldorf Astoria Human Resources department hired 800 individuals from the streets within a mere 24 hours, proceeding to train them all within another 24 hours. The entire management team, including myself lived in the hotel during the 6 week long lasting strike.
The remarkable outcome was that the hotel continued to function seamlessly, and as an unexpected bonus, customer feedback indicated an improvement in service quality as the strike went on.
Likewise, when I assumed the role of F&B Manager at the El San Juan Hotel in Puerto Rico, I faced an urgent predicament. I urgently needed to recruit 32 bartenders and 46 waitresses within a week. The H.R. department was overwhelmed; its processes required to be updated, and its entry requirements were excessively stringent. Did one truly need a bartender with a bachelor’s degree? Time was of the essence, as the opening was a mere 14 days away. I needed candidates urgently and stationed two assistants on either side of Avenida Isla Verde, right in front of the hotel, each holding a large banner that read: “Bartenders, Waitresses, and Waiter Jobs. Excellent Salaries, Incentives, and Generous Tips. Apply Now. Open for 24 Hours Only.”
The same message was replicated in Spanish: “Bartenders, camareras y camareros. Excelentes salarios, incentivos y propinas generosas. Aplica ahora. Abierto solo por 24 horas.” We had nearly 100 potential employees queuing up in less than six hours. I personally conducted interviews alongside the Assistant HR Manager, and within three days, after completing all necessary formalities, the training manager could commence his duties. However, since he needed to gain proficiency in F&B and customer service, I had to step in and provide guidance. His previous role was that of a D.J. He had been recruited for his exceptional communication skills. It speaks volumes about the recruitment criteria of that era.
Now, leaders, managers, and companies can bemoan labor shortages incessantly. However, what truly matters is that they take proactive steps to address the issue—after all, it is their responsibility. Even if digital approaches fail to yield results, perhaps it is worth revisiting tried-and-true tested methods of the past in specific circumstances.
Now, what do these labor shortages in the hotel industry spell for young hoteliers? What prospects await young hoteliers seeking to embark on a career journey in the current landscape? As I have expounded in previous blog posts, there has never been a more opportune time for rapid career progression. Regardless of your location, companies across the globe are actively seeking talent, albeit sometimes overlooking the right avenues. However, it is commendable that the top-tier companies comprehend their roles despite my earlier critiques.
“Another generational transition is on the horizon, this time with millennials at the forefront. In approximately 10 years, they will begin to step aside from the main stage. As the workplace undergoes significant transformations due to rapid advancements in artificial intelligence (A.I.), their transition may be accelerated. And now, Gen Z is already positioned at the starting line, ready to embark on the professional journey.
As the field becomes increasingly crowded, it is of utmost importance to carefully choose your starting point, and I cannot stress enough that the optimal choice lies within the top global companies.
Speaking from my experience as a “boomer,” I want to emphasize that my journey from an active hotelier to a career mentor and author has been an expedition. Continuously learning, I feel blessed to possess a wealth of experiences and observations on how the hotelier landscape has evolved over 4 decades. Currently occupying what I call “the helicopter seat,” I am removed from the ground, surrounded by an overflow of information and the daily hustle. This vantage point allows me to discern the jobs that will remain and become even more appealing and those that will gradually be replaced by A.I.
While this shift holds positive implications for the hotel industry, it is essential to note that due to the comparatively slower pace of change compared to other sectors, there will undoubtedly be jobs that remain irreplaceable by A.I. for the foreseeable future. However, there will also be roles that simply disappear, particularly in Human Resources, Sales, Marketing, and Finance. I invite you to reflect on this blog in 10 years to witness the changes firsthand.
Additionally, Generation Z company leaders are likely to exhibit a different level of patience toward their millennial managers than the latter group demonstrated toward the boomers. Interestingly, some boomers continue to excel in their roles until today, and I genuinely celebrate their accomplishments.
As an aspiring hotelier embarking on your professional voyage, it is imperative to strategically position yourself. This entails identifying the company that offers the most promising avenues for advancement, recognizing that it may not necessarily equate to the highest compensation. During the early stages of your career, your primary objective should be securing a position within the finest establishment possible. These establishments are typically 5-star or at least 4-star hotels affiliated with leading global companies. In this esteemed list, I would also include I.H.C.L. (Taj Hotel, Resorts, and Palaces) in South Asia. Although their global presence is relatively limited, encompassing locations such as London, New York, Boston, San Francisco, Cape Town, Dubai, and Zambia, they are renowned as exceptional organizations and have garnered international accolades.
While their expansion primarily focuses on India, I highly recommend considering them. Indeed, excellent opportunities abound, but it is crucial to overcome the entry barriers. In an upcoming blog series, I will delve further into these companies, providing valuable insights and tactics to enhance your prospects of acceptance.
May you make the most of every opportunity that comes your way.”
Helmut H. Meckelburg