Labor shortages in the hospitality industry

The hospitality sector is facing a significant challenge: a persistent shortage of skilled workers. This issue affects not only the operational efficiency of hotels and restaurants but also the overall guest experience. The lack of skilled staff can lead to reduced service quality, increased costs due to overtime and temporary staffing, and a negative impact on customer satisfaction. In this blog, we will explore the root causes of these shortages, their impact on the industry, and potential solutions, including the role of technology and automation.

The European hospitality industry, in particular, is grappling with severe skills shortages. According to recent data, 10% to 20% of positions in the accommodation sector remain unfilled due to a lack of skilled applicants. This shortage is not limited to entry-level positions; the sector also struggles to attract and retain highly skilled professionals, including university graduates. The lack of skilled workers in key areas such as management, culinary arts, and customer service is especially concerning. This trend is exacerbated by the industry's reputation for offering limited career advancement opportunities and poor work-life balance, which deters potential employees.

Causes of labor shortages

• Post-pandemic workforce shifts: The COVID-19 pandemic led to significant changes in workforce dynamics. Many employees left the industry or reevaluated their career paths, resulting in a reduced pool of experienced workers as the sector reopened. The pandemic accelerated a shift towards remote work and flexible schedules, which the hospitality industry has struggled to adapt to. As a result, many workers have chosen careers in sectors that offer more flexibility and stability.

• Industry reputation and work-life balance: The hospitality industry is often associated with long hours, low pay, and limited career advancement opportunities. This perception deters potential employees, especially younger workers who seek better work-life balance and career prospects. The industry's traditional model of long shifts and weekend work can be unappealing to those who value personal time and flexibility. Additionally, the lack of clear career paths and professional development opportunities makes it difficult to attract and retain skilled workers.

• Skills development challenges: The lack of robust skills development programs hinders career growth opportunities, making it difficult to retain trained staff. Many hospitality businesses lack the resources or infrastructure to provide ongoing training and education, which is essential for advancing in the industry. Without these opportunities, employees may feel undervalued and seek opportunities elsewhere.

Impact of labor shortages

• Operational efficiency: Labor shortages lead to increased workloads and pressure on existing staff, jeopardizing company viability and service quality. When there are not enough employees to cover shifts, remaining staff must work longer hours, leading to burnout and decreased morale. This can result in mistakes, delays, and a general decline in service standards.

• Financial performance: The inability to fill positions can result in overtime costs and the need for temporary staffing solutions, which are often more expensive. Additionally, the cost of recruiting and training new staff can be high, especially if turnover rates are high due to dissatisfaction or burnout. These increased costs can strain a business's financial resources and impact profitability.

• Guest experience: Reduced staff numbers can lead to longer wait times and decreased service quality, negatively impacting guest satisfaction. Guests expect a high level of service and attention to detail, which can be difficult to deliver with a reduced workforce. Negative reviews and decreased customer loyalty can follow, further impacting business performance.

Solutions for labor shortages

1. Technology and automation

Enhanced efficiency: Automation streamlines processes, reducing manual tasks. Examples include automated check-ins via self-service kiosks and AI-powered chatbots handling routine inquiries, allowing staff to focus on personalized guest interactions.

Improved guest experience: AI personalizes services by analyzing guest data to tailor offers and communications, enhancing satisfaction and loyalty.

Optimized workforce management: Advanced systems like Spica’s Dynamic Scheduling module enable real-time scheduling adjustments, efficient absence management, and accurate payroll processing. This ensures optimal staffing levels and reduces administrative errors.

2. Skills development and training

Lifelong learning opportunities: Implementing robust training programs improves recruitment and retention by offering career growth opportunities, including technical and soft skills development.

Digital access to training: Utilizing digital platforms provides accessible learning resources for all staff, helping small businesses compete with larger chains.

3. Industry image and work conditions

Rebranding the industry: Improving the industry's reputation by highlighting career opportunities, offering flexible scheduling, and promoting a positive work environment can attract more talent.

Collaboration with educational institutions: Developing partnerships with schools to promote hospitality careers increases interest among young people and ensures well-prepared new employees.


Addressing labor shortages in the hospitality industry requires a multifaceted approach. By leveraging technology to enhance operational efficiency, investing in skills development, and rebranding the industry to attract new talent, hospitality businesses can mitigate these challenges. As the sector continues to evolve, embracing innovation and improving work conditions will be crucial for its long-term success. According to recent surveys, 57% of hotel general managers believe that automation will not only enhance the guest experience but also boost their financial performance. However, 43% feel that their workforce management technology is not advanced enough, highlighting the need for further investment in digital solutions. By addressing these gaps and adapting to changing workforce dynamics, the hospitality industry can overcome its labor challenges and thrive in a competitive market.