As Travel Returns, The Search For Labor Bedevils D.C.'s Hotel Industry

The hotel industry is attempting to mount a comeback in D.C. and other urban markets around the country. But hiring and retention challenges, combined with new regulations some in the industry view as regressive, are hampering that recovery.

"Everybody's talking about the search for labor," First Hospitality Group President and CEO David Duncan said. "It is the new pandemic."

Over the past year, the leisure and hospitality sector added the most jobs in the Washington area. Yet the sector lags all others in terms of pandemic job recovery, with a nearly 7% gap between pre-pandemic and May 2022 employment numbers, according to Bureau of Labor Statistics data compiled by Delta Associates. 

That environment has led hospitality groups to try new strategies like happy hours and other perks to sell job opportunities almost "in the same way that we sell our hotel rooms," said Ben Cadwell, chief operating officer at Accor, speaking Tuesday during Bisnow's Lodging and Investment Summit at the Renaissance Washington hotel.

"On average, we are still missing about 15% of our workforce," Cadwell said. "Rather than HR people, we need to have sales people who can go out to market... [and] find those employees."

D.C.’s hotel occupancy is still below 2019 levels, according to the latest STR data. And Dave Pollin, co-president of hotel development and management firm Buccini/Pollin Group, said several headwinds are hampering the industry’s recovery.

He said the federal government's slow return to the office has hurt travel, plus travel from international visitors and domestic tour groups is still well below pre-pandemic levels. 

"That school group from Iowa, Jan. 6 is still resonating in their head, ‘Gosh, is it safe, I don’t know," he said. "Maybe in 2023 we're going to see a stronger recovery there." 

A law passed in D.C. this spring could further complicate the recovery, Pollin said. The law, which allows the District to regulate hotel room cleaning and maintenance, was backed by labor unions and Mayor Muriel Bowser. The D.C. Council passed it with an 11-2 vote in April, DCist reported.

Bowser, in an April 1 letter to Council Chairman Phil Mendelson, said it was "imperative for both safety and consumer protections that guests be provided routine and enhanced housekeeping and maintenance of communal spaces in hotels and motels unless the guest opts out of cleanings." 

But Pollin said the bill in effect would require hotels to clean rooms every day unless guests opt out. And he said it would be particularly troublesome to implement because hotels don't have the staff to keep up with cleaning and maintenance requests.

"Why don't they go pick on the shoe store or the ice cream parlor or some other business?" Pollin said at the event. 

Others speaking on the panel also expressed concern with the new D.C. law.

JLL Hotels & Hospitality Americas CEO Kevin Davis said the environmental lobby should have been engaged on the issue, considering more frequent washes would require additional energy and water. (Council Member Mary Cheh was one of the bill’s dissenting votes and cited environmental concerns as a primary motivation.)

Davis said some of the hospitality sector's chief competitors aren't dealing with the same level of regulation, and he said regulating hotels at a time when they're still in recovery could make for an uneven playing field.

"If you think about it from a competitive perspective, think about short-term rentals — i.e. Airbnb — that generally don't have daily cleaning. As a matter of fact, on top of that there's an add-on for cleaning," Davis said. "It really puts our industry at a competitive disadvantage."

Davis said he believes Covid is a reset for the hospitality industry akin to the iPhone for cellphones, and changes to longstanding practices will be necessary in order to bring back lagging markets like D.C.

He said the traditional hospitality industry could learn from the short-term rental model by leaning into the gig economy, something he said younger workers are more predisposed toward anyway.

"They've got a tech-enabled labor force," Davis said. "If you’ve got no checkouts that day, there’s no housekeeping. You don’t have a regular housekeeping staff and you have people that, when they come, instead of cleaning 10 or 12 or 14 hotel rooms a day, maybe they clean two or three and then they’re onto the next job."

But the problem goes beyond bringing in people to clean rooms. Rob Kline, CEO and co-founder of Chartres Lodging Group, said the industry has to be mindful of the benefits and opportunities for growth a hotel's staff have. If corporate workers are able to take advantage of remote and hybrid work schedules while other employees are required to work on-site each day, that inequity could demotivate employees, Kline said.

"Here you’ve got property employees being managed by the corporate office who are enjoying this great new lifestyle and yet they're managing people that don't get the benefit of that," Kline said. "How do you reconcile that? That is a massive inequity that is emerging and we have to deal with that and I don’t have an easy answer." 

Pollin said retaining workers starts with culture. Focusing on making a workplace more attractive and giving employees a sense of mission — say, by focusing on sustainability — makes retention more likely, he said.

"Why would a housekeeper at a Homewood Suites not walk across the street and go to the Residence Inn for 10 cents more? It’s because that person feels like they belong," Pollin said.

Despite the lagging recovery and fears of an economic downturn, Pollin said he won't cut pay for workers. His firm is in the process of building a Marriott in NoMa, not far from Union Station.

The brand name of Bethesda-based Marriott will attract business travel, Pollin said. But positioning the hotel near Union Market will also make it attractive to the increasingly important “bleisure” traveler who extends their stay by a few extra days to work remote and explore a new city.

Rooting a hotel in a sense of place will be critical to attracting the next generation of travelers and workers, said Sequoyah Hunter-Cuyjet, vice president of Determined by Design. She said she urges her D.C. clients to move beyond generic photos of the U.S. Capitol or cherry blossoms and embrace a deep sense of place and neighborhood engagement. 

In a market where hotel owners are holding onto their properties longer as they wait for the economy to recover, Hunter-Cuyjet said that hotels can thrive by building a food, beverage and community events program that draws out locals and makes the property an exciting destination for its neighborhood.

“For a hotelier who's trying to have longevity, they'll be able to achieve that through their community engagement,” Hunter-Cuyjet said. “It's a slower return on your financial investment, it's a higher return on the longevity of your property.”