The Growing Labor Challenge in Hospitality
The hospitality industry in Georgia and the Southeast is at a crossroads. As the region prepares for major events—including Atlanta’s MLB All-Star Game (2025) and FIFA World Cup (2026)—hotels are gearing up for increased demand. However, operators face a major challenge: rising labor costs, stagnant employment recovery, and declining Net Operating Income (NOI).
Our latest analysis shows that:
- Wages in hospitality have grown by 15% since 2019, but staffing levels remain below pre-pandemic levels.
- Employment recovery is at just 87.5% of 2019 levels, yet payroll costs are at record highs.
- NOI is under pressure, forcing operators to make tough choices: cut services, raise rates, or rethink workforce management strategies.
As the AHLA Driving Decisions Through Data panel takes place in Atlanta, we explore how the region’s hotels can address labor cost pressures without sacrificing service quality.
Rising Wages, Shrinking Margins: The Financial Squeeze
The Numbers: A Labor Market in Transition
Our analysis indicates three key trends affecting hotel profitability across Georgia, Florida, the Carolinas, and the broader Southeast:
1️⃣ Wage Growth Has Outpaced Revenue Growth
- Hotel wages have increased 15% since 2019, far exceeding revenue growth.
- Labor costs now account for a larger percentage of total operating expenses, squeezing margins.
2️⃣ Hotel Employment Recovery is Lagging
- Despite strong demand, employment in hospitality remains below 2019 levels (87.5%).
- Hotels are struggling to attract and retain talent, even as wages increase.
3️⃣ NOI is Declining
- Rising wages, labor shortages, and increased costs have led to a steady NOI decline since 2019.
- Hotel operators report higher payroll costs but fewer employees per property, impacting service efficiency.
How Does the Southeast Compare?
While Georgia’s hospitality sector remains resilient, it faces the same labor cost pressures as the rest of the country. However, unique regional trends emerge:
✔ Atlanta’s High-Demand Market – With major upcoming events (MLB All-Star Game, FIFA 2026), demand for skilled hospitality workers is outpacing supply. Hotels must pay more to retain talent, but margins remain thin.
✔ Florida’s Seasonal Workforce Pressures – South Florida hotels, particularly in Miami and Orlando, see seasonal wage spikes as competition for workers intensifies.
✔ The Carolinas’ Expanding Tourism Industry – Cities like Charlotte and Charleston are experiencing record visitor numbers, but labor costs and turnover remain obstacles.
In every case, rising labor costs threaten NOI, forcing operators to rethink their labor models.
Why Hotels Are Losing Workers to the Gig Economy
The hospitality industry isn’t just competing against other hotels—it’s competing against the gig economy. Uber, Amazon, and Just Eat have all capitalized on workers’ demand for flexibility, better pay structures, and on-demand employment models.
Gig Economy vs. Traditional Hospitality Employment (2019-2024):
- Gig economy employment has grown by 45% since 2019.
- Traditional hotel employment remains below 2019 levels.
- Many hospitality workers are choosing gig work over hotel jobs due to better work-life balance and higher perceived earnings flexibility.
Hotels must respond. The hospitality sector must adopt flexible workforce models, better labor forecasting, and competitive compensation strategies to attract and retain employees.
Solutions: The Future of Workforce Management in Hospitality
So how can hotels in Georgia and the Southeast combat rising labor costs and declining NOI?
1️⃣ Data-Driven Labor Forecasting
- Hotels must use predictive scheduling tools to align staffing with real-time demand.
- Reducing overstaffing while avoiding labor shortages can improve profitability.
2️⃣ Flexible Scheduling & Workforce Optimization
- Operators must offer more flexible work arrangements, including dynamic shifts and split shifts to retain employees.
- Companies like Uber and DoorDash have redefined on-demand work models—hotels can adapt similar approaches.
3️⃣ Technology-Enabled Labor Management
- Smart workforce platforms can help hotels reduce payroll inefficiencies, optimize shift planning, and minimize overtime costs.
- The ability to adjust staffing in real-time based on guest demand will define the most profitable hotels moving forward.
The Future of Hospitality in the Southeast
As labor costs continue to rise, hotels that embrace data-driven workforce strategies will outperform those that don’t.
At the AHLA Driving Decisions Through Data panel in Atlanta, industry leaders will discuss:
- How to balance labor costs with service quality
- What new workforce models can improve NOI without cutting service
- Why hotels must compete with gig economy employers to retain top talent
With FIFA 2026 on the horizon and Atlanta’s hospitality sector booming, operators who leverage data, optimize labor, and rethink workforce models will not only survive—but thrive.
Want to learn more? Let’s continue the conversation on LinkedIn.
About Unifocus
Unifocus is a global leader in workforce management technology, serving properties in 68 countries and 31 languages. Designed for hotels, Unifocus boosts hotel performance with intelligent analytics that automate labor budgeting and forecasting, delivering precise staffing levels and workloads by streamlining Planning & Scheduling, Time & Attendance, and Operations Management tools. Employees love the mobile app for seamless communication, with features like effortless shift swaps using the award-winning Shift Genius, and real-time prioritization of guest requests, housekeeping and maintenance tasks. Operational efficiency is accelerated with compliance alerts that allow managers to focus on what truly matters: maximizing guest satisfaction and fostering a productive, engaged workforce. Discover the future of hotel operations with Unifocus. Visit Unifocus.com today.