The Leisure and Hospitality Industry Is Growing, But Why?
The ADP Workforce Vitality Index has grown the most for the leisure and hospitality industry because of higher spending and low unemployment rates.
The ADP Workforce Vitality Report (WVR) has seen consistent growth in employment and wages for the leisure and hospitality industry in 2016 and 2017, and there are no signs that the trend is going to slow down.
In the fourth quarter of 2017, full-time job holders in the hospitality industry experienced wage growth of 4.7 percent, according to the WVR. Additionally, full-time employees who switched jobs within the hospitality industry saw a 6.3 percent increase in wages — more than any other industry wage growth for people who switched jobs.
Beyond the fact that leisure and hospitality being the lowest paid industry where even a small increase in wages would translate to a large growth, several other factors are also driving this growth, including America's booming economy and low unemployment rates. Additionally, there is a need for renewed focus on the employee experience within this industry as a way for employers to remain competitive.
Growth in the Leisure and Hospitality Industry
According to The New York Times, the United States is seeing a big bump in the economy, and the Standard & Poor's 500 index — a key indicator of general economic health — is up 12 percent since November 2016. This surge is creating a low unemployment environment. According to the Bureau of Labor Statistics, unemployment is at just 4.3 percent, meaning that nearly every employee that wants a job is currently working. To translate to the consumer environment, low unemployment rates mean more consumers have jobs and can afford the luxury of travel and other leisure activities, which could be contributing to this growth curve.
In addition, partnerships and other mergers are creating a more cohesive network of travel and leisure opportunities for consumers, delivering a higher quality experience for all travelers. For instance, Marriott's acquisition of the Starwood Hotels & Resorts Worldwide brand late in 2016 has created the world's largest hotel organization. According to Hospitality Net, this expands the firm's reach to more than a million rooms available in nearly 6,000 hotels worldwide. With travel being one of the markets with competing customer loyalty programs, this helps to unify the system into one customer-focused effort. Travelers that formerly had to make decisions between the two establishments and their respective rewards programs can now eliminate that point of friction in the buying process, resulting in a more positive customer experience.
Finally, research highlighted in the Boston Globe showed that Millennials are beginning to travel, and this demographic is traveling more often than Gen X and Boomers. In 2016, Millennials took an average of 2.38 vacations, which equates to 44 percent more than the average Baby Boomer. When we consider that this is the largest demographic in the United States, it's no surprise that the leisure industry is growing rapidly.
This combination of economic impacts, changes within the hospitality industry and demographic shifts all combine to push the ongoing growth to greater heights.
Lessons for Other Industries
Some of the factors that are driving this growth are macro trends, such as shifting demographics and lower unemployment. The lesson for employers is to be conscious of these kinds of shifts in order to understand and take advantage of any opportunities they may provide. For example, the reduced unemployment rate makes hiring even more competitive, even though many employers have already been stretched to the seams to keep their recruiting and talent management strategies up to date. Additionally, the concept of shifting populations in the workplace is not a new topic, but if those same populations make up part of your customer base, then it could lead to changes in buyer behaviors and preferences. Those changes need to be factored into business strategies and goals.
The bottom line for HR and talent leaders is this: Continuously gather information, not only on what's happening within the four walls of your organization, but outside as well. Political, economic and technological trends converge in the workplace and can alter what works today from what worked yesterday. By staying in tune with these types of movements, HR leaders can continue to contribute to their employers in a strategic manner, enabling better business performance through people-centered practices.
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