Soundless Covid Tremors
By Stephen Renard President, Renard International Hospitality Search Consultants | March 28, 2021
Noiseless tremors are causing the erosion of the traditional employment model in the hospitality industry and this has gone unnoticed during this pandemic. The level and amount of experienced and educated hospitality executives will reach a historic low level in 2022 not seen since the recessions of the 1970s.
The COVID-19 pandemic has caused significant stress on the global economy, with industries experiencing grave impacts from unprecedented lockdowns, travel restrictions, and business closures. The hospitality industry has probably taken the major hit, causing traditional employment models to change completely.
Over the past year, we've seen employment rates plummet (specifically amongst experienced and educated hospitality executives) to lows not seen since the recessions of the 1970s. In contrast to this severe uptick in unemployment, new hotels and restaurants still continue to open globally in 2021.
This rapid growth of new business however, does not necessarily solve the employment problem. What needs to be examined here is the discrepancy in new business vs. the number of available experienced employees. This discrepancy could ultimately damage the health of the hospitality industry long term.
According to the Lodging Econometrics' Global Construction Pipeline Report, 5,216 hotels with 650,222 rooms were constructed in the US alone in 2020, which is only an incremental decline compared to other years. Hotels under construction continue to move toward opening. Through year-end 2020, the US opened 833 hotels accounting for 97,203 rooms, bringing the US supply of open and operating hotels to 58,569 with 5,557,119 rooms.
Additionally LE is forecasting another 929 hotels with 107,407 rooms to open in the US by the end of 2021. If this projection proves to be true, it will represent almost a 2% percent increase in new hotel supply. On top of that, hotel giants such as Marriott Accor, Hilton, and IHG are expected to open 7000 more hotels within the next year.