- While pay and benefit inflation headwinds persist, wage pressures and hiring challenges have moderated, Marriott International CFO Leeny Oberg said on the company’s earnings call Tuesday.
- The Bethesda, Maryland-based hotel operator is one of many lodging companies who have struggled to staff hotels as pandemic restrictions eased and travel spiked. Nearly all hotels (97%) experienced staffing shortages while half reported being severely understaffed with housekeeping being the most critical staffing need, according to a June survey from the American Hotel & Lodging Association.
- “Hiring challenges have moderated and the number of open positions in the U.S. is now below 2019 levels,” Oberg said, according to a transcript of the call, noting that guest surveys indicate that customer satisfaction is continuing to rise.
Wages are top of mind for many CFOs who are faced with the challenge of keeping costs in check ahead of a possible recession while also retaining talent in a still strong labor market.
The Fed last week raised the federal funds rate by a quarter percentage point to a range of 4.5% to 4.75%, slowing monetary tightening amid signs of a cooling economy, CFO Dive previously reported. But the Labor Department also reported that unemployment last month fell to 3.4%, the lowest level since 1969.
“The wage pressures have moderated,” Oberg said on the Tuesday call in response to questions. “And we are seeing a more normalized environment, both at the property level as well as above property.”
Marriott is not the only lodging company to signal a potential brightening in the labor outlook this earnings season. Last week Hilton Worldwide CEO Chris Nassetta said that the labor market situation has “eased a lot.”
“We are not fully back to where we were in terms of access to labor, but we’re getting awfully close,” Nassetta said according to a transcript of the hotel operator’s Feb. 9 call.
Separately, during Marriott’s call one analyst asked whether housekeeping — an amenity that has been curtailed at some hotels due to labor constraints — would be coming back. Marriott CEO Anthony Capuano said that depended on the type of hotel.
“In our luxury portfolio, we are essentially back to pre-pandemic full daily housekeeping,” Capuano said. “In the upper upscale tier, we have daily tidy, so not a full cleaning, but making the bed…cleaning the trash, etcetera. And in our select service..we have every other day tidy.”
Marriott reported strong fourth quarter results, with comparable system-wide constant dollar revenue per available room rising 28.8% worldwide compared to the year-earlier quarter.
“Just two years after experiencing the sharpest downturn in our company's history, we reported record financial results. Our fee-driven, asset-light business model generated significant cash during the year, allowing us to both invest in the growth of our business and return $2.9 billion to shareholders,” Capuano said in a statement.
The company is also on track to acquire Hoteles City Express, a portfolio of about 152 hotels in Mexico and Latin America that the company previously said marked its entry into what it called the “affordable midscale” hotel segment.