Drawing on multi-market hotel portfolio data, long-term placement trends and workforce deployment across U.S. properties, the analysis finds that 65% of hotels continue to report staffing shortages even as wages rise. Turnover remains elevated and asset managers are increasingly turning to payroll per occupied room rather than payroll as a percentage of revenue as a more accurate labor metric.
“Demand has stabilized and costs have reset,” said Steven Kamali, CEO, The Staffing Agency. “What has not expanded is the labor market. The operators who will outperform in the next cycle are not those who hire the fastest or spend the most.”
Extended-stay hotels continue to show the strongest resilience due to service models aligned with leaner labor structures. Luxury properties face mounting service expectations alongside acute skill shortages, while midscale hotels operate with thin margins where labor instability quickly impacts reviews and brand compliance.
The analysis also points to broader structural pressures reshaping hotel labor economics, including immigration constraints, a shrinking pipeline of frontline service workers and increased reliance on alternative labor sources such as contract staffing, gig labor models and offshore administrative support.
Hotels that invest in stable workforce design, retention and supervisor continuity consistently outperform competitors, even during softer demand cycles, the findings show. “Labor today is not simply an operational input; it’s the heart of the experience,” said Brad Wilson, chairman, Ace Hotel. “The hotels performing best now are the ones where teams feel seen and supported, where service is human rather than scripted.”
As brands accelerate conversions, tighten standards and adopt new technology faster than workforce capacity can adapt, the white paper warns of a growing gap between brand expectations and on-property execution. “The next operating cycle will reward realism,” the report states.
Tags: Steven Kamali, The Staffing Agency Brad Wilson, Ace Hotel.