A recent SKIFT research on hotel CEO compensations in 2021 created heated discussions in the industry.

Some argued that the hotel bosses well deserved their compensation for navigating their hotel companies through one of the most difficult times in hospitality's history.

Others claimed that the disparity in pay between the CEOs and operational staff was the prime reason the industry was experiencing the current labor shortages.

Here is my take on the subject.

I believe it is easy to defend the disparity in pay between hotel CEOs and operational staff like housekeepers and front desk clerks by comparing it to the difference in responsibilities. I have been the CEO of companies for three decades and believe I have first hand experience on the subject matter: stress, sleepless nights, 70-hour work weeks, weekends busy with work, vacations - how do you spell that?

So let’s examine the responsibilities of a housekeeper at any Marriott property - managed or franchised. The ONLY work responsibility of a housekeeper is to do his/her job well to earn their pay. In many metropolitan areas this is unionized job, which limits the daily number of rooms you can be tasked to clean.

You do not need a college degree or a graduate degree to do the job. If you are methodical, disciplined and handy, you can become a proficient housekeeper in a few months. This is a great job for people that are starting their career, that are in between jobs, or are students (I did it!), etc.

Compare this to the CEO of Marriott, a $47 billion company with 8,000 hotels, 1.5 million rooms and 165 million loyalty members. It takes decades of formal education and industry work experience to reach that point. And the responsibilities toward shareholders, employees, developers, guests? For creating and executing the strategy and direction of the company? Gigantic!

I would say, the Marriott CEO is even underpaid!

As for the existing labor shortages, this is not a new or hospitality-native problem. I believe there is a deeper reason than Marriott CEO’s pay for the labor shortages in hospitality.

In 2019 - before the pandemic - there were one million open positions without takers in U.S. hospitality. Currently, there are 1.5 million open positions in U.S hospitality alone, but these are out of 11 million open positions in the U.S. economy as a whole. And all of this at record low unemployment rate of 3.6%!

Construction, retail, healthcare, education, transportation, even the military are experiencing exactly the same labor shortages as we do in hospitality. Most small business owners cannot find workers and this is not because of pay disparity.

Exactly the same is the situation in Europe, APAC and even in 1.4 billion citizens-strong China!

The pandemic, lockdowns and restrictions, and government handouts made people reluctant to take entry positions, to do mundane, unpleasant and repetitive jobs. This is why labor participation has been dropping over the last several years to an all time low in this very moment. Humans simply NO LONGER want to do the dirty, repetitive and uninspiring jobs like housekeeping, cleaning toilets and washing dishes anymore.

Some say that today’s inflation and soft recession we are experiencing will be forcing people to rejoin the work force, un-retire, etc, but this won’t solve the long-term labor shortages. The only way out of the current situation is the rapid adoption of technologies- AI, robotics, automation, IoT, blockchain, etc. in order to augment and replace the need for human labor. Period.

Max Starkov
Hospitality & Online Travel Tech Consultant & Strategist

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