Tourism’s Labor Pangs : Employment Issues Plague Industry

In an industry where the help is as transient as the customers, Russ Lawther is something of an anomaly.

Lawther already has spent 17 of his 40 years in the hotel business. He stayed seven years at his last job. And he’s hoping to stick around longer than that at the Ritz-Carlton Laguna Niguel, where he currently is working behind the front desk.

“I’ve been here 18 months and I hope to be here in 18 years,” said Lawther, who has ambitions of moving into management. “This is the kind of place where you can make a career.”

Figuring out how to find--and keep--more Russ Lawthers is one of the biggest challenges facing the travel and tourism trade. Tarred with a reputation as a low-wage, high-burnout profession, the industry nevertheless is poised for dramatic growth over the next decade as aging boomers hit the road and fast-growing foreign economies produce more world travelers.

The Washington, D.C.-based Travel Industry Assn. of America predicts U.S. tourism employment will surge by more than 18% to about 7.5 million jobs by 2005, outpacing job growth in the economy at large.

But with fewer young workers projected to enter the labor force over the same period, executives are already sweating about filling positions in an industry where high turnover has long been the rule rather than the exception. Between 1994 and 2005, the number of U.S. workers age 25 to 34 is expected to decline by about 4 million, according to government statistics. And the overall labor force is growing more slowly than it did a decade ago.

Experts say tourism-related businesses are going to have to rethink their pay scales, working conditions, and training programs--not to mention their attitudes about entry-level employees--to maintain a work force capable of meeting the demands of a growing and increasingly sophisticated swarm of travelers.

“For years, this industry treated people like disposable commodities, like those little shampoos in the hotel bathrooms,” said Cheri Chester, general manager of the Ramada Conestoga in Anaheim. “Now there’s a realization that there isn’t this endless pool of people to fill these positions. We’ve got to find ways to make this industry more attractive to potential employees.”

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Shortages of travel and tourism labor already can be seen throughout the country. Sparsely populated resort communities such as Michigan’s Mackinac Island import summer help from the Caribbean and Europe. Employers in Jackson Hole, Wyo., were angered this year by an Immigration and Naturalization Service crackdown that resulted in the deportation of about 100 much-needed Mexican hotel and restaurant workers.

Southern California, with its immense population and steady influx of immigrant labor, has fared better than many regions. But experts say high employee turnover remains a nagging, industrywide problem.

Bellman David Merchant greets guests at the Ritz-Carlton hotel.

In the hospitality sector, for example, the average annual turnover rate for hotel staffs nationwide increased to nearly 60% in 1995, up from 48% in 1985, according to a survey by Los Angeles-based PKF Consulting. That means hotels on average last year had to replace almost two of every three employees, many of whom left for a better situation. Industry watchers say turnover rates for front-line workers such as housekeepers are even higher, averaging 100% or more annually.

Part of the trouble is the low-paid, entry-level nature of much of the work, and schedules that require employees to labor when everyone else is playing.

And, unlike Europe and developing countries where serving travelers is viewed as a dignified profession, Americans tend to hold such jobs in disdain, says hospitality analyst Bruce Baltin, a former hotelier who is now senior vice president of PKF Consulting.

A graduate of Cornell University’s highly regarded hotel school, Baltin said his choice of career paths didn’t exactly impress the neighbors, whose children were studying law and medicine.

“They said: ‘You’re going to college to be a desk clerk?’ ” Baltin recalled with a laugh. “It wasn’t perceived as socially acceptable.”

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In the past, the industry could afford to shrug off frequent defections as normal, even inevitable, said Maree Forbes, a Charlottesville, Va.-based travel industry consultant. But the tightening labor pool has executives taking a hard look at their management practices and calculating what turnover really costs them.

Forbes estimates the average hotel spends $3,000 in paperwork, recruitment expenses and general inefficiency every time it loses a worker--not to mention all the customers lost because of lousy service. Multiply that times a few dozen staffers and it doesn’t take long to add up to real money.

“A lot of managers have tended to focus more on the quality of the buildings than the people who deliver the service,” said Forbes, partner in The Forbes Group/Travel Information Resources Inc. “But you can’t recycle people like the towels.”

Salaries and benefits already are rising in areas where competition for employees is especially keen. In fast-growing Nashville, for example, where unemployment is running at a razor-thin 3%, the Opryland Hotel provides workers with free transportation, subsidized on-site day care and temporary housing in addition to competitive wages.

But mind-set is just as important as money in retaining qualified workers, said John Dravinsky, general manager of the Ritz-Carlton Laguna Niguel, where the employee motto is: “We are ladies and gentlemen serving ladies and gentlemen.”

Winner of the 1992 Malcolm Baldrige Quality Award for customer service, the Atlanta-based Ritz-Carlton hotel chain has one of the most extensive employee development programs in the business. Every new hire, from maid to manager, is put through two full days of orientation to learn the Ritz-Carlton philosophy of service before beginning lengthy on-the-job training.

Additionally, self-directed work groups are replacing traditional top-down management throughout the luxury chain.

Price tag for all this worker development: more than $4,000 a head. But Dravinsky says his hotel’s low 20% employee turnover rate, high worker morale and high customer satisfaction are worth every dime.

“I had a gentleman call the other day and book $38,000 worth of business with me,” he said. “I can’t afford to lose a customer like that because we were short-handed or an employee was rude. I’d rather spend the money up front to build a first-rate staff.”

Dravinsky says other hotel chains and tourism-related businesses will have to take similar measures to compete for a shrinking pool of employees.

The private sector also has stepped up its work with educators to get young people interested in tourism careers and to overcome their perceptions of the field as merely low-paying summer employment.

Tourism-related management jobs are projected to balloon more than 30% by 2005. Additionally, travel and tourism is fertile ground for small businesses and entrepreneurs, something virtually unknown to budding job seekers, says Bill Evans, economist with the Travel Industry Assn.

“A lot of people don’t realize the scope of opportunities,” Evans said. “There are a lot of misconceptions.”

At the urging of industry leaders, about 30 California high schools offer tourism-focused vocational programs--up from just a handful 10 years ago.

Katella High School in Anaheim started such a program three years ago. Disneyland, the Anaheim/Orange County Visitor and Convention Bureau, the Anaheim Marriott and other Orange County tourism employers have worked with the school to give students hands-on training and get them thinking about making a career in California’s third-largest industry, says instructor and project coordinator Maria Hoffman.

“They keep telling the students there is a real need,” Hoffman said. “They know they have a better chance of attracting and keeping these kids if they expose them early.”

Whether the industry is successful or not may help determine whether California and the United States can reverse their declining share of the fast-growing worldwide tourism market.

“The quality of the tourism product is dependent upon the quality of the work force,” said Sheryl Spivack, associate director of the International Institute of Tourism Studies at George Washington University. “We’re going to have to come up with some creative solutions to compete.”

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Growth Industry

With a bumper crop of aging baby boomers and international travelers leading to a tourism boom, U.S. tourism employment is projected to grow by more than 18% from 1994 to 2005, faster than the economy at large. But there may not be enough workers to fill those positions.

THE GOOD

U.S. tourism industry employment growth is projected to increase.

Millions of workers:

1994: 6.4

2005: 7.5

THE BAD

There will be fewer young workers to fill all those new jobs. Over the same period, the number of U.S. workers ages 25-34 is projected to decline by 11%.

Millions of workers ages 25-34:

1994: 34.4

2005: 30.5

THE UGLY

The industry will have to do a better job of retaining employees as the pool of younger workers shrinks. In the hotel business, for example, turnover has increased dramatically since 1985.

Hotel industry average employee turnover rates:

1985: 47.8%

1990: 55.3

1995: 59.8

Sources: Travel Industry Assn. of America, U.S. Department of Labor, PKF Consulting