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Hospitality Industry Faces Wage Growth Pressure, Job Openings

Hospitality experts in a recent national webcast by Marcus & Millichap discuss the general economy and talk about some of the more concerning issues happening in the industry at the moment.

By Natalie Dolce | nataliedolce | | Updated on February 11, 2016

According to the latest national hospitality market review and 2016 outlook webcast, presented by Marcus & Millichap , one of the hottest topics right now is hotel wage growth, which is accelerating as hospitality job openings increase. According to John Chang , a first VP at Marcus & Millichap , the growth is about 5% compared to around 2%-2.5% in other industries. “Wage pressure on hospitality sector is one of the most concerning issues I talk to investors about,” he says. Andrew Alexander , president of Red Roof Inn , says that of their 460 properties all across the US, the issue is less on wage pressure and more on the job openings. “It is hard to find the employee,” he says. Alexander explains that a lot of the 30-year housekeeping employees, for example, are leaving, and not a lot of young people are enticed to go into it. To help compensate for that, he says, they have upped the training and the wages and benefits to help entice the younger individual into the housekeeping field. “The key is the training and the ability to advance,” he says. Ben Brunt , principal and EVP of acquisitions at Noble Investment Group , says that as you see the rate of increase in RevPAR level off, “you will start to see that wage growth pressure have more of an impact on hotel profitability.” Check back with GlobeSt.com in the next day or so where the group discusses the overall economy and what to expect in the coming year.

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