So far in 2023, more than 77,000 workers in U.S.-based tech companies have been laid off, figures by Crunchbase News show.
As news has been swirling around this topic for the past few months, I’ve consistently wondered, “Can these layoffs benefit the hotel industry?”
December 2022 Bureau of Labor Statistics data for the leisure and hospitality sector shows a total of 1,521 job openings. While I imagine most of those openings are for frontline staff roles, I feel there’s potential to invest in roles above the property level. Especially in tech-based roles.
We’ve seen how failing to infuse capital and attention into a company’s systems can lead to massive disruptions. Take the wave of Southwest flight cancellations between the weeks of Christmas and New Year’s Day as an example. Southwest officials said the disruption was caused by challenges including overloaded internal scheduling platforms that match crews with flights.
Southwest CEO Bob Jordan said in a statement in December that “The tools we use to recover from disruption serve us well 99% of the time, but clearly we need to double down on our already existing plans to upgrade systems for these extreme circumstances so that we never again face what’s happening right now.”
Companies across the hospitality and tourism industry are likely facing tech debt. HNN’s Bryan Wroten reported at the 2022 NYU International Hospitality Industry Investment Conference tech debt means that all the legacy infrastructure across hotels, airlines and rental companies installed years ago is taking time and money to update.
But having skilled people who can help deploy new technology is crucial, Choice Hotels International President and CEO Pat Pacious said at the conference.
This, I think, is where the layoffs across the tech sector can provide an opportunity for hotel companies to aggressively recruit.
But I wanted to ask an expert in the industry if this was even feasible.
A month ago, at the 2023 Americas Lodging Investment Summit, Bryan, I, and a handful of other trade journalists had the opportunity to have breakfast with some Marriott executives, including President and CEO Tony Capuano, in a private dining area at Savoca restaurant inside the JW Marriott Los Angeles L.A. LIVE.
It was a lovely meal. We indulged in the fluffiest scrambled eggs, a variety of roasted vegetables, crisp bacon and piping hot coffee.
As we were wrapping up the morning, I asked Tony the very question I began the top of this blog with.
His response: "When I think about our above-property infrastructure, certainly, cybersecurity, technology, [and] the big re-platforming projects we're in the midst of ... we will certainly look at some of the things that are going on across that sector and see if that creates opportunity for us."
He added that "there is a war for tech talent" which has also affected the hospitality industry.
Pre-pandemic, the hospitality sector was viewed as a safe harbor for jobs in the sense that people would always travel and hotels are a great place to start and build a career, he said.
“Understandably that confidence was shaken, and you do have folks that have left the industry, likely for good,” he added.
“I would sit with Chris [Nassetta] at Hilton or Mark [Hoplamazian] at Hyatt and have this same conversation,” he said. “We’ve got to do a better job of telling the story of the remarkable careers that folks can build in this industry.”
As laid-off tech experts look for their next employer, now is a crucial time to build up that story of why hospitality can again provide a safe harbor for jobs. Hoteliers need to rebuild that confidence in property-level and corporate teams.
You never know, you just might acquire some of the best tech talent your companies have ever seen. Let's do what we can to then keep them.
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The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.
Editor’s note: Chris Nassetta serves on the board of directors for Hotel News Now’s parent company, CoStar Group.