No experience necessary. If you have a positive attitude and can flash a smile, you’re in. Luxury travel is booming. They’re hiring! Isn’t everyone? And it’s exposing a human resources crisis, something familiar across many industries but especially problematic in a segment where the front-line workers are essential to the customer experience, and in fact are often the most memorable part of the product – good or bad.
From lights out to out of sight, from shutdowns to sold out, it’s different than in the past. The industry is not only filling its rooms, cabins, tables and seats; it is doing so at record-high prices, eschewing its traditional crisis recovery strategy of deals and discounts. That means customers are not able to rationalize bad service with big savings.
So far, the only folks missing out on the recovery are those in the trenches, often referred to as associates or team members. Housekeepers, kitchen staff, bellhops, engineers and so-called back-of-the-house folks are in short supply, even as the dollars, euros and pesos roll in.
Shannon Knapp, the CEO of The Leading Hotels of the World, told journalists attending the 21st International Luxury Travel Market, held earlier this week in Cannes, France, that 2022 will end up as the best year ever for the group, founded in 1928. Bookings for 2023 are running 26% ahead of where they were a year ago for its over 400 properties, which are reaping market-leading rates.
The story is much the same across the board, with industry executives marveling at how quickly business rebounded.
“Like the clouds parting after a stormy day, and the sun shining through,” says Sir Rocco Forte, CEO of Rocco Forte Hotels, which has over a dozen hotels and resorts in Europe. Rates at the hotels he manages are 20%-to-50% higher than before Covid.
Matthew Upchurch, Chairman of Virtuoso, a network of travel advisors who will sell around $30 billion in luxury trips this year, says 2023 bookings are trending 47% ahead of 2019, its best year previously.
In terms of the industry’s pricing power and what travel-hungry consumers are willing to shell out to get away, he told reporters at a press conference, “I’ve been in the industry over 35 years, and I’ve never seen this before.”
But as business and rates keep soaring, recruitment and training are becoming bigger issues, the latter because so many new hires aren’t returnees but are new to hospitality, with estimates range from one-third to half.
Sir Rocco says the industry is delivering “four-star service at five-star prices.” The result is consumers are “complaining they are being taken advantage of.”
“There is going to be a separation between those organizations that treat their people well,” Upchurch warns. “Those that won’t (invest in their staff) will see a degradation in rates because (the experience) won’t be worth it.”
Executives acknowledge that part of the challenge is before the pandemic, the industry was known for long hours and low wages.
“That’s the reputation, and it needs to change,” says Lindsey Ueberroth, CEO of The Preferred Travel Group, with over 650 luxury properties in its marketing portfolio. “We need to make ourselves more attractive,” echoes Sir Rocco.
The industry is bigger than you might have imagined. Before the pandemic, it was responsible for about one in 10 jobs globally, according to the World Travel & Tourism Industry. In other words, finding new workers quickly is difficult in the best of times, particularly since the places they are needed aren’t necessarily in places with large, young populations, the demographic most likely to be okay working on weekends, holidays and when everyone else is taking their vacations.
Keynote speaker at ILTM’s opening forum, Fred Sirieix, a veteran manager of Michelin-starred fining dining establishments before becoming a reality TV star on BBC’s Million Pound Menu, urged attendees to double down on training, offer a more individualized approach to workers and recommit to delivering exceptional experiences to guests.
“Things have changed since I did my professional training 35 years ago. The new generation is different. What was acceptable then is either not accepted anymore or questioned. This means the industry needs to adapt and change,” he told the over 3,500 executives who gathered in the same auditorium that hosts the Cannes Film Festival.
He says, “The lack of labor and level of motivation for the workforce to remain in the industry are the two biggest challenges we face because you just can’t deliver a memorable customer experience without staff.”
A big challenge for operators is “people don’t come from colleges with training anymore. They are all different and they need to be trained and nurtured according to their ability.”
Covid can no longer be used as an excuse; he told delegates. “The guest is king. This is fundamental. This is where it starts. It is the customer that pays the wages.”
Record revenues will only keep coming if operators realize they need to change their ways of doing things. It’s not acceptable to just hire staff and put them in on the front lines: “Only perfect practice makes perfect performance. Excellence isn’t an accident. We do have a choice. Make sure people are ready and prepared and are able to deliver the experience we want our guests to have. It’s our responsibility.”
Forte says he has doubled the training budget for his boutique group, while Kempinski CEO Bernard Schroeder says the company now spends 5% of its payroll on training, which can run up to 150 hours per year per employee.
Michael Minchin, Chief Marketing Officer of Auberge Resorts, says his group has benefitted because many of the hotels it manages are owned by UHNWs who view them as passion projects. “They have a longer-term point of view (than financial owners). Many of them are involved in the properties. They live in the same communities, so they are more willing to make the investments,” he says.
While 5-star hotels often poach well-trained staff from competitors and cultivate a pipeline from universities with hospitality and tourism programs, that’s not enough anymore.
Hilton Hotels Luxury Brands Head Dino Michael says one result of the crisis is hotels are recruiting outside the industry, hiring “very eager, enthusiastic team members; but they’ve never picked up a tray. If you have the right attitude and can smile, you have a job.”
For example, in Washington D.C., one of its luxury properties is recruiting in the District for the first time, selling the perks and opportunities of working in a hotel as a reason to join the industry. While it may put more pressure on management from a training perspective, Michael says it answers a long-held criticism that local communities don’t get as much benefit as they should from the industry.
“In one building, you can learn finance, sales, marketing, plus everything else. We are one of the few places you can start clearing dishes and end up running the place or as a corporate executive,” he says. Chris Silcock, Hilton’s Chief Commercial Officer began his career as a catering and banquet waiter at one of the chain’s properties in Watford, England.
“As an industry, we need to be more aggressive in selling ourselves; that you can come here and learn valuable skills,” he tells Forbes. Michael says the hospitality industry would benefit from recruiting more like the military, where the armed forces aggressively pitch the skills you will learn when you enroll. And then there are the perks. Hilton team members can stay at its thousands of properties around the world on the cheap, including its Waldorf Astoria, Conrad and LXR luxury hotels.
Marriott International Global Brand & Marketing Officer Tina Edmundson says the recruiting crisis is an opportunity to bring the next generation of associates into the industry. “To me, the biggest hook is the seduction of travel,” she says, pointing to the discounts all employees get. “If you want to travel the world, we make that possible,” she adds. Like airline employees who also endure long hours and irate customers for the opportunity to globetrot, Marriott team members can stay in its Ritz-Carlton, St. Regis, W Hotels and Edition hotels where rooms can easily go for over $1,000 per night at deep discounts when there is availability.
Some executives say how they handled the pandemic shutdowns is paying off with loyalty. Corinthia Hotels Communications Director Alice Jonsdottir Ferrier says each of its properties ran webinars for staff with experts discussing both mental and physical health, and there were a series of “Corinthia’s Got Talent” online competitions with prizes awarded.
Still, she says the company had to rethink its employment contracts, adjusting for workers who wanted to come back at reduced hours or needed flexible scheduling, elements that would have been non-starters in the past.
Christopher Laure, Area General Manager of Southern Europe for InterContinental Hotels, notes, “Not everyone wants to work 18 hours a day.” He says the recruitment crisis has forced the company to look in new places beyond universities with hospitality programs. France’s tourism industry currently has 250,000 open positions, he says. One recent front desk hire in Paris was a former air force pilot looking for a career switch. The company has also increased referral payments and signing bonuses for entry-level jobs.
The new message to prospects is, “Come as a waiter, and if that’s what you want, that’s fine. But if you want to get into finance or marketing, it’s down the hall. We will help you.”
Dorchester Collection COO Francois Delahaye says his group was buoyed by its approach during closures. “It’s not the thickness of the marble. It’s our people. We didn’t fire anybody, and we paid them 100% when we were closed.”
Still, he acknowledges money matters. In May, the company began adding a 5% discretionary service charge to guest bills that goes directly to front line staff. For a dishwasher or maid, it can mean around an extra 700 euros per month.
He says another factor is its hotels’ reputation as being at the top of the luxury pyramid and its partnerships with big names like Alain Ducasse. “For your career, we are good for your resume,” he says.
One sector benefitting from the uneven service in the luxury segment is travel advisors.
According to new research from American Express, more than 90% of wealthy travelers plan to use them for at least some of their holiday bookings over the next year.
Internova Travel Group Chief Executive Office J.D. O’Hara oversees more than 100,000 travel advisors in more than 6,000 company-owned and affiliated locations, predominantly in the United States, Canada and the United Kingdom, with a presence in more than 80 countries.
He told media at ILTM, “We conducted our own survey last year that showed 79% of Americans would rather work with a human being over an online travel agency. By working with a human being, consumers say they have access to information that can’t be found online.”
Some of that information will doubtlessly be about how various hotels are doing from a staffing and service standpoint.