By Guest commentary Friday, May 25th, 2018

Gerhard Apfelthaler

By Gerhard Apfelthaler

Last year, Los Angeles County set another tourism record with 48.3 million visitors. In Ventura County, travel spending rose from roughly $1.1 billion in 2000 to $1.7 billion in 2016. In Santa Barbara County, the industry saw similar increases, from $1.3 billion to $2.1 billion. Local tax receipts related to travel spending roughly doubled in both counties. So the future of tourism is rose-colored, right?

Not necessarily.

In a 2017 report, global staffing provider Manpower predicted that positions in the restaurant and hotel business will be among the most difficult to fill.

When we hear about talent shortages in hospitality, most of us immediately think of skilled and semi-skilled service jobs. There is no doubt that hospitality businesses still have those positions, in which employees work long hours for relatively low pay. It is, therefore, not unexpected that retention rates in the industry are low — very low. According to the National Restaurant Association, the overall staff turnover rate in the restaurant and lodging sector has reached levels above 70 percent — almost 30 percent higher than the average for all private sector workers.

But this only tells part of the story. Like many other industries, the hospitality sector has transformed, and there has been a noticeable professionalization. Both in the “front of the house” and “in the back of the house,” job profiles have shifted, and new careers have emerged. Whether it is in restaurants, lodging, travel or destination businesses, employees no longer simply “grow up” in an industry as they learn the ropes and move up the ranks into top management positions. More discerning customers and sophisticated investors, as well as new technologies, have created a greater need for a highly educated workforce. From social media influencers to customer experience specialists to revenue managers to chief technologists, the industry today hires for positions that didn’t exist just a few years ago.

In addition, there is a significant shift in the mindset among the next generation of employees, the millennials. A 2017 study conducted at Oregon State University showed that millennials are the primary reason for the labor shortage in the industry. Among all age groups surveyed, millennials were the least satisfied with their jobs and most likely to leave the industry within a five-year period — despite the possibility of stellar careers with hockey-stick growth in income. To millennials, income is not everything. They differ from previous generations in their priorities and in their career expectations. They value workplace culture, require feedback more frequently, seek diverse career experiences, want rapid career progression, and, above all, aspire to do meaningful work.

The responsibility to make careers in hospitality more attractive, therefore, falls to the industry. If hospitality businesses want to attract the next generation of leaders, they must find ways to align their company culture with the modern workforce. They need to leverage technology and professional management to augment service for customers and reduce routine tasks for their employees. Another part of the solution is education. Government, schools, colleges and universities have to prepare the next-generation workforce for such meaningful careers. Cutting-edge programs and so-called educational pathways are important elements in that.

Tourism and hospitality are too important to neglect. Globally, the industry currently sustains 266 million jobs, about 1 in 10, and that number is projected to rise to
347 million by 2024. The industry contributes more than $7 trillion to the global economy and is forecast to reach $11 trillion by 2024. HospitalityNet, a global platform for the industry, reported in 2018 that 14 million global jobs in hospitality and tourism are at risk if the talent gap isn’t bridged, triggering a decline of $610 billion in gross domestic product in the world economy. Ultimately, this decline would be reflected at the local level in the Tri-Counties.

• Gerhard Apfelthaler is the dean of the School of Management at California Lutheran University, which will start a new major in hospitality and tourism management this fall.
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