The Great Resignation is clearly upon us, and with it comes a very mixed bag. On the one hand, the fact that American workers are quitting in droves opens the door for job seekers to more easily find work. On the other, right now many industries are struggling to fulfill their hiring needs, and if labor shortages continue, it could seriously impede some businesses' ability to generate revenue.
In November, a record-setting 4.5 million U.S. workers left their jobs voluntarily, reports the Bureau of Labor Statistics. As a result, as of November, the labor market had an estimated 10.6 million jobs vacancies.
But while quit rates were up in November across the board, they were notably high in the hospitality sector, which saw 6.1% of its workforce resign. And that's problematic for an industry that's still very much struggling to recover from the pandemic.
Restaurants and hotels can't afford another hit
Early in the pandemic, restaurants saw their revenue nosedive when they were forced to shutter to in-person diners and limit capacity for months thereafter. Meanwhile, hotels saw a devastating decline in bookings in 2020, and while things improved in 2021 thanks to a surge in leisure travel, many properties are still struggling with a massive revenue shortfall.
The emergence of the omicron variant isn't helping. With COVID-19 cases surging, the demand for in-person dining could plunge in the near term, especially with cold temperatures taking outdoor dining off the table in many parts of the country. But restaurants may not be able to easily pivot to takeout and delivery for one big reason: a lack of staff.
Hotels are in a similar boat. While bookings may decline in the near term due to health concerns and general travel woes (think mass cancellations of flights and the general hassle of having to show proof of a negative COVID-19 test to enter the country), some hotels may be forced to turn away guests or skimp on service due to staffing shortages.
Of course, it's easy to see why workers aren't thrilled to be employed in the hospitality sector these days. Not only is the industry notorious for subpar pay, but it's also extremely public-facing, making it one of the riskier areas to work in during a pandemic. Throw in the fact that there are job opportunities elsewhere, and it makes sense that the industry is having a hard time hiring and maintaining staff.
A blow to real estate investors
Hospitality REITs, or real estate investment trusts, have struggled during the pandemic. And the fact that the industry is generally struggling to hire is only making matters worse.
If restaurants and hotels can't staff accordingly, closures could ensue. And that could leave real estate investors with serious losses to grapple with.
The good news is that despite the fact that COVID-19 cases are raging, the economy itself remains strong. That means consumers may be in a decent position to spend money on restaurants and hotels once case numbers start to fall and health concerns subside. But whether restaurants and hotels will manage to meet that demand is a whole different story.