U.S. Hotel Labor Market Stabilizes as Flexibility and Retention Efforts Pay Off

The hotel labor market is showing signs of stabilization, with employers reporting improved applicant flow, slower wage growth, and greater success in retention and recruitment, though uncertainty persists amid potential economic and policy changes.

Labor Market Conditions Improve for Hotels

Recent reports from hotel industry leaders indicate that the labor environment for hotels is stabilizing after several years of volatility. Greg Presnol, vice president of operations at Palette Hotels, stated that 2026 is shaping up to be a more favorable year for hotel employers compared to 2024 and 2025. He noted that hiring is becoming more balanced, with applicant flow improving and wage growth slowing down from the rapid increases seen in the immediate post-pandemic period.

Kerry Ranson, partner and president of operations at Raines, echoed these observations. He pointed out that, starting in the latter part of the second quarter, hotels have seen fewer open positions and shorter hiring times. There has also been an increase in employee retention, with more staff choosing to stay in their roles.

Retention and Flexibility Drive Success

Both Presnol and Ranson highlighted the importance of retention strategies and flexible scheduling in improving the labor market for hotels. Ranson explained that companies are moving away from rigid shift schedules, offering employees more flexibility in their working hours. This approach has helped recruit and retain staff by accommodating their needs and preferences.

Presnol emphasized that developing existing employees has become a priority. Instead of focusing solely on rapid hiring, hotel operators are investing in career pathways and professional growth for their staff. This shift is particularly important for filling leadership positions such as general manager or director of sales, where internal development is proving more reliable than external recruitment.

Wage Growth Moderates

While wages in the hospitality sector continue to rise, the pace of growth has moderated. Presnol observed that wage increases are no longer accelerating as quickly as they did during the height of the labor shortage. Ranson described the current wage environment as more consistent, contrasting it with the period when hotels had to raise pay by as much as 25% to attract candidates regardless of skill level.

The stabilization of wage growth is partly attributed to changes in other industries. As layoffs become more common elsewhere, hospitality jobs are becoming more attractive, leading some former workers to return to the sector.

Leadership Talent Pool Expands

Ranson noted a noticeable improvement in the quality and professionalism of candidates for leadership roles, particularly in general manager interviews. He observed that, beginning around the midpoint of 2025, applicants have demonstrated stronger skill sets and greater industry knowledge.

Both Ranson and Presnol agreed that the talent pool for hotel leadership positions has expanded, making it easier to fill these roles with qualified individuals.

Ongoing Uncertainty and External Factors

Despite the positive trends, industry leaders remain cautious about the future. Ranson expressed concerns about the sustainability of the current stability, citing unpredictable economic and policy headwinds. He compared the uncertainty in the employment environment to the fluctuating demand for hotel services over the past few years.

Both executives also mentioned potential impacts from immigration policy. While neither reported direct effects on their properties, Ranson noted that policy changes have influenced employee mindsets. To prepare for possible disruptions, some companies have increased their use of contract labor, though overall reliance on such labor is decreasing.

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