Hotel CEO Says Big Tips, Not Higher Wages Are Needed To Ease Labor Shortage

As the pandemic begins to slowly but surely subside, multiple industries are now faced with a new issue: the labor shortage. Fueled by people quitting their jobs and waiting for better opportunities to come, there just aren't enough workers to fill all the open positions in food, service, and hospitality jobs.

As companies are increasing wages in order to seem more competitive, one hotel chain has a different approach.

They want to encourage more tips, instead.

Unsplash | Jp Valery

Ted Darnall, the CEO of HEI Hotels and Resorts stated that the company was doing more to encourage guests to leave tips for the workers, Business Insider reports.

Their hope is to get more and more guests to authorize tips at check-in, so that when they check out, they pay that extra bit automatically.

This would be better in a cashless society.

As Business Insider reports, people are a lot less likely to carry cash now as they were before the pandemic began. Hotel guests would generally leave cash tips in an envelope, but that doesn't happen so often anymore.

Minimum gratuities may be in the chain's future, too.

Let's face it, not everyone tips. But with a minimum gratuity in restaurants, it would guarantee a tip going to the staff for each table.

HEI is considering this, and would have the tips pooled together and distributed among workers based on how many hours they work, Darnall states.

This is, as Darnall believes, the key.

Unsplash | Marten Bjork

Darnall acknowledges the fact that many other hotels and restaurants are offering raises and bonuses, stating that he doesn't think that will work: "If somebody pays a dollar more then somebody else is going to match that.

"I call that an unsustainable competitive advantage," he says. "In other words, you're at a competitive advantage for an hour, until somebody decides to match it."

The struggle to fill positions is real.

Companies all over are having a really hard time filling their vacant positions. Darnall says that, "People are taking jobs, leaving them after three weeks. And that's the worst thing that can happen because the cost associated with that is enormous."

Business Insider also reports that, according to the owner of a New York hotel, some workers don't even show up for their first shift.

That's why bigger tips are important.

Darnall hopes that encouraging guests and customers to leave bigger tips will have a positive emotional effect on workers, which will in turn encourage them to stay on the job for longer.

"They've got to like walking through that door in the morning," he says.

This will come down to the customer, though.

Darnall says that it's important to encourage the hard work of the staff members by leaving tips.

Tips during the pandemic have gotten bigger.

During the height of the pandemic, people were tipping more because they knew how workers were being impacted. Now that restrictions are easing and things slowly get back to normal, it's hard for most people to know if they should continue to leave bigger tips.

For the sake of the workers, though, hopefully they will.

h/t Business Insider.