Hotels drive majority of continuing unemployment claims


Source: Hotel News Now
By Del Ross
January 15, 2021

The most recent unemployment data from the U.S. government shows more than 5 million continuing claims, many from the early spring of last year—a figure that is dominated by the hotel industry, according to labor-management data from Hotel Effectiveness.

As of Jan. 10, only 45.2% of more than 8.3 million pre-pandemic hotel jobs have been re-filled, forcing 4.5 million hotel workers to seek non-industry jobs or ongoing public support. The new Payroll Protection Program loans are expected to help, but true recovery will be delayed until occupancy returns to historical levels.

An analysis released this week by CBRE identified a fundamental shift to variable labor costs, indicating that hotels will continue to rely on general managers to provide direct oversight of each department as staffing levels fluctuate with occupancy. Mid-level department managers, representing fixed costs, will not be re-hired until demand increases and is stabilized above breakeven levels.

“GMs often struggle to determine how to address variable need for staffing,” said Taylor Beauchamps, chief product officer for Hotel Effectiveness. “The decision of whether to add permanent staff, use outsourced, contract labor or deploy significant overtime is critical to cashflow management, but many managers do not have the analytical tools to inform their choice. As a result, some hotels are investing more in short-term labor than they really should.”

The data and chart above represent a sample of more than 4,000 same-store hotels and excludes hotels that have been closed during the analyzed period.

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