Issue 2: September 2021 (1,212 words/5 Minutes)
It’s great to have you here.
For every issue, I will be sharing my different perspectives on the tourism industry and what is happening. We will look at some of the trends and issues impacting the industry, the winners and losers. As well we will look at some of the emerging opportunities and critical issues impacting the industry.
I hope you enjoy it, and most importantly, it gives you some thoughts and ideas and a different perspective for your organization.
The world and within it the tourism industry have changed quickly and in unexpected ways. To adapt or be left behind, the concept of destination management is taking center stage. The subject had been raised in several worldwide destinations before the pandemic, mainly in the context of “overtourism,” such as crowding and traffic. Now with the COVID pandemic, discussions of destination management have been hastened and broadened to include natural resources, climate change, community quality of life, and now an emerging and persistent labor shortage. Relatedly, destination residents, many of whom are tourism workers, and local government are more visibly disgruntled with tourism as it had been before the pandemic.
The overarching theme of these issues is sustainability. Sustainable tourism is defined by the UN Environment Program and UN World Tourism Organization as "tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment, and host communities."
The tourism industry is expressing increased awareness and need for sustainability. Most tourism conferences will feature sessions on what sustainability is and how to address related issues. While many DMOs are considering sustainable approaches and programs.
Let’s start with the issue of labor and pay. A critical element of sustainability is a healthy labor force, supported by fair wages and benefits, opportunities for advancement and a sense of being valued for the work they do. Many who staff hospitality businesses are local area residents, some of whom historically have been some of the lowest paid in the industry with little access to health care and benefits. This practice has been implicitly accepted for decades on the premise - and promise - that these workers would advance within the industry. While many have the majority likely have not. And now, the COVID-19 pandemic that forced many workers to be laid off, also laid bare the house of cards that the promise of unfulfilled higher wages and potential opportunity was built on.
The time off gave workers a pause to think about their work and how it fits in their lives. In a July 8 article, Bloomberg reported that over half of those employed in the hospitality field would not return to their jobs.
Many, understandably, are seeking new opportunities in other fields than hospitality. But even more so, a recent report from McKinsey & Company, showed that a raise can make a difference but employees are leaving because they don’t feel valued by their bosses and in their organizations, or didn’t feel “a sense of belonging at work.” The report also exposed a gap between what employees want from work versus what employers think workers want, which must be closed to get workers back and satisfied.
When I recently asked my twenty-six-year-old daughter about working in the hospitality industry, she answered a matter of fact, “no way, dad, they want your soul for $12 an hour." According to the Bureau of Labor Statistics, all hospitality industry employees were paid an average hourly rate $12.40 in 2011; by 2021 it rose by 30% to $16.23. In contrast, Disney's stock price during the same period grew from $37 a share to $183, an almost 400% increase during the same time, exemplifying the gap between Disney stockholders and frontline employees, just one of many examples of this dynamic.
Health benefits are another issue. The Bureau of Labor Statistics reports that just 35% of hospitality workers even have access to company-sponsored health care. It's no wonder that many are looking and finding other options that include better pay, benefits, and also more control over one's life and satisfaction.
I find it amazing how post-pandemic hotels and restaurants suddenly now have money to pay employees more. A Motel 6 in South Lake Tahoe advertises $16 an hour for housekeepers and a place to live. They and other businesses could have afforded increased pay and benefits prior to the pandemic when the economy was on a roll, and excutive pay and stock pricies were skyrocketing. Why now? Because workers, voting with their feet are leaving the industry and businesses now realize they can’t sustain operations without their workforce and have to lure them back.
As DMOs grapple with sustainability for their destinations, it begs the question, can a destination claim to be sustainable if its tourism industry workers are underpaid and lack healthcare and other benefits?
As destinations and DMOs are beginning to promote "sustainability," the profile of this issue will rise among consumers. It is not hard to imagine consumers factoring in whether destinations take care of their workers in their travel destination decision-making.
As well another powerful dynamic is in play between tourism and the local community. Some residents who have endured overtourism are questioning tourism, asking the more pointed and challenging question, what do we as residents and as a community want and need from tourism? Framed up from that viewpoint, local tourism businesses’ pay, benefits and conditions will be even more visible, especially among those whose profits are sent back to distant headquarters.
DMO's and state tourism offices should be cautious as they venture further into sustainability; sustainability is not in their DNA. I live in South Lake Tahoe. Many environmental agencies and non-profit organizations focus on environmental sustainability, including the United States Forest Service, State Parks, The Tahoe Regional Planning Agency, The League to Save Lake Tahoe, The Tahoe Fund, to name a few. Such agencies like these in destinations will take a hard look at sustainability plans developed and promoted by tourism offices. Labor supply is a real and long-term issue and should be included in every DMO’s threat analysis. (It might be helpful for state tourism agencies to implement a long-term labor forecast for the industry.) As long as workers have other options, the industry will have to consider labor as a current, future and potentially limited resource.
The tourism industry is changing more in the past 18 months than in the past few decades. DMOs, which primarily have been in the promotion business are by necessity defining their new roles. Many are shifting to destination management and sustainability concepts but, in the end, do not have control of the factors to bring about real change.
Labor wages, benefits, conditions and housing are all interrelated, and at this point remain unresolved. it should be noted that DMOs control very little of what can be implemented given their positioning, while businesses, NGOs and public agencies have much more control and power to implement. To effect real change, DMOs can and must forge partnerships with these entities. Tourism organizations can and should be a voice at the table, in order to help influence changes that are authentic and of benefit to both residents and visitors. These are not mutually exclusive. If a destination promotes itself as sustainable, that has to be throughout. Anything less will come up short in the eyes of the community and of travelers.
Now is an opportune time for DMOs to take long-term look at supply and demand for labor in the tourism industry, and to ally with its economic and environmental partners to ensure lasting and meaningful change in an industry that is the backbone of many communities throughout the country.