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Hotel industry emerges from pandemic with new business model, possibly fewer workers

Companies — and travelers — have learned how to get by without things like daily room cleanings and free breakfasts, and changes could be long-term.

Josh Jones sands chairs on the back patio of the Westin in Snowmass Village, Colo., on May 12, 2020. (Kelsey Brunner/Aspen Times/AP)
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As Americans travel more, they are encountering a hotel industry that has undergone dramatic transformations and might never return to its pre-pandemic business model.

Some properties, particularly in leisure-centric areas like Florida, are scrambling to find enough workers to staff bustling properties. Many others, meanwhile, have still not brought back all their workers amid a continued travel slump.

But one thing that hotels across the board are considering is whether many of their customers are willing to accept fewer services than before, such as daily room cleanings and sizable breakfast spreads, analysts say, and that might mean a smaller hotel workforce in the years following the pandemic.

The leadership of hotel brands like Hilton, Park and Host have increasingly touted savings and increased efficiency from reducing labor costs on services like cleaning in calls and presentations to investors since the economy began to recover last year.

“The work we’re doing right now in every one of our brands including Tru and Hampton everything else is about taking — making them higher margin businesses and taking — creating more labor efficiencies, particularly in the areas of housekeeping, food and beverage and other areas,” 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.”

Jim Risoleo, the CEO of Host Hotels, one of the private-sector owners of Marriott, said the industry was increasingly moving toward “opt-in to housekeeping services as opposed to opt-out going forward,” on a call with investors in November.

“And it’s going to vary on, frankly, the type of property we have and the personal profile of the customer,” he said.

It is just one of the many ways that businesses are adapting to the challenging pandemic year by finding ways to operate with fewer workers. Meanwhile, many hotel stocks have rallied in the last six months in anticipation of more travel and a changed business model; Hilton is up about 20 percent, Host nearly 18 percent.

Analysts like Michael Bellisario, at the financial company Robert W. Baird & Co., said that many hotels were looking at permanently reducing services like cleaning and free breakfasts, amid other cuts.

Like many of the changes that companies, consumers and workers are making, the pandemic allowed hotels to see what a different future could look like — in this case one with less offerings of those costly services.

Bellisario said the reductions come on the heels of years of rising costs and slower growth for hotels.

“Owners and operators are using the pandemic and the opportunity to cut costs and permanently change, or at least temporarily change, the operating model because it was already an issue,” he said.

Surveys taken during the pandemic showed guests overwhelmingly preferred the suspension of daily room cleaning, too.

“As people have gotten more comfortable traveling and business has picked up, owners and operators have just said, ‘Yeah, let’s make it opt in,’ ” Bellisario said. “It’s all about if we took it out of the system during covid, let’s either keep it out of the system, keep it out of the operating expenses or bring it back slowly to in some modified fashion.”

But the shift away from daily room cleaning has raised concern among workers and labor leaders that it will mean reduced jobs and workforce hours as the travel industry’s labor sector rebounds from a brutal year.

Job loss in the leisure and hospitality industry has been particularly acute over the last year: Employment at accommodations like hotels is still down more than 25 percent — more than 500,000 jobs — from where it was before the pandemic.

In a new report, the labor union Unite Here estimates that the loss of daily room cleanings could mean that at least 181,000 cleaning jobs — about 39 percent of all cleaning jobs in hotels — never return.

“The hotel industry is trying to get back to full occupancy without ever bringing back its full workforce,” said D. Taylor, president of Unite Here, which represents some 300,000 hospitality workers in states such as Florida, California and Nevada. “That’s bad for workers and guests, because hotel executives are using covid-19 as an opportunity to eviscerate housekeeping jobs and cut cleaning services … Housekeeping jobs are the backbone of the service economy, and taking these jobs away means that many working families and especially communities of color might never recover.”

Reduced cleaning practices have continued at some hotels recently even as more rooms are occupied, workers said.

“It really increased our workload,” Ming Liao, a room cleaner who has worked at a Westin hotel in Boston for 13 years, said of new cleaning practices at the hotel, which she said means some rooms are not getting cleaned until guests check out.

Liao was called back into work in March after being on furlough for a year. She said she was brought back on three days a week until the end of May, when she was given a full-time schedule again.

She says a lot of her former colleagues have yet to be called back to work despite occupancy at the hotel increasing.

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Brenda Holland, a cleaning worker at a DoubleTree hotel near the Seattle-Tacoma International Airport, has been on furlough for more than a year now. She’s been hoping for a return to work for months but has yet to be called back.

“I’m hoping to be able to go back at the end of this month,” she said. “But I don’t know whether that is realistic because of the new practices they are trying to implement, stopping the daily room cleaning and only cleaning at checkout.”

Hilton spokesman Nigel Glennie said that individual staffing levels are decided hotel to hotel, but said the No. 1 challenge facing the industry was finding qualified workers.

“Although there are many paths to recovery, the one thing we know for sure is that Hilton is a business of people serving people,” he said in a statement. “Even as we work with our ownership community to manage the cost of running a hotel, we will seek and respond to guest feedback in a way that maintains the high standards of hospitality expected from Hilton.”

The American Hotel and Lodging Association said that current guidelines for the coronavirus era have stated that “guest rooms occupied by the same customer over multiple days should not be cleaned daily, unless requested.”

The association said through a spokeswoman that the industry is concerned by worker shortages caused by unemployment benefits, schooling and child care issues, and continued health concerns about workplaces. About 96 percent of the association’s members reported being somewhat or severely understaffed, on a recent survey.

“As the industry welcomes the return of summer leisure travelers, we, along with many other industries, are now facing a rapidly emerging issue of staffing shortages, including housekeeping staff,” it said in a statement. “But the increase in leisure travel will not offset the nearly 500,000 hotel jobs lost due to covid.”

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Judith Ramirez, a furloughed cleaner at a Sheraton hotel in Honolulu, has been leafleting guests in front of the hotel, along with other furloughed cleaners to ask guests to request regular room cleanings.

“We have lots of co-workers who are still not working,” Ramirez said.

Unite Here said that the Sheraton Waikiki ended daily room cleanings during the pandemic, and it has yet to rebound. Even though occupancy is around 70 percent, only about 50 percent of room cleaners are back at work, the union said.

Marriott, which owns Sheraton and Westin brands, did not respond to requests for comment.