Summary:
- 65 percent of hotels face staffing shortages despite rising wages.
- Extended-stay remains the most stable segment.
- Midscale hotels’ thin margins make them sensitive to labor instability.
APRROXIMATELY 65 PERCENT of U.S. hotels report staffing shortages despite rising wages, according to The Staffing Agency. Turnover remains high as well due to immigration limits and other factors.
TSA’s white paper, “The Hotel Workforce Reset: The Year Ahead 2026”, found that extended-stay remains the most stable segment due to labor-aligned service models. Luxury hotels face rising service demands and skill shortages. Midscale hotels operate on thin margins, where labor instability affects reviews and brand standards.
“Demand has stabilized and costs have reset,” said Steven Kamali, TSA’s CEO. “What has not expanded is the labor market. The operators who will outperform in the next cycle are not those who hire the fastest or spend the most.”
The report highlights forces reshaping U.S. hotel labor, including immigration limits on traditional labor pipelines, a demographic gap in frontline service roles and the rise of alternative labor sources such as contract staffing, gig work and offshore administrative support.
The white paper stated that hotels with structured workforce models outperform competitors, even in slower demand cycles. Retention, supervisor stability and flexible staffing deliver higher returns than aggressive hiring alone. Asset managers increasingly use payroll per occupied room instead of payroll as a percentage of revenue.
“Labor today is not simply an operational input; it’s the heart of the experience,” said Brad Wilson, Ace Hotel’s chairman. “The hotels performing best now are the ones where teams feel seen and supported, where service is human rather than scripted.”
The report warns that as brands accelerate conversions, tighten standards and adopt technology faster than workforce capacity, a gap is growing between brand expectations and on-property execution. The next operating cycle will reward realism, the white paper said.
The Trump administration will add about 65,000 H-2B seasonal worker visas through Sept. 30, doubling the total for the year, according to a Federal Register notice from the Departments of Homeland Security and Labor.
