More than half of hotels are still short-staffed despite 70% raising pay

Seventy percent of hotel owners are paying more to fill shifts. More than half of them are still short-staffed anyway. That is the tension at the center of the American Hotel & Lodging Association's Front Desk Feedback survey of 246 hoteliers, fielded in late February 2026 and released in March, as reported by Hotel-Online and Hospitality Net.

Hotel owners in the survey said operating costs remain their biggest challenge. Cost of goods and supplies led the list at 71%, ahead of labor costs at 65%, fluctuating demand and occupancy at 59%, utility and energy costs at 50%, insurance premiums at 43%, and workforce shortages at 42%, according to the AHLA release.

Supplies outrank labor on the worry list

The AHLA numbers put cost of goods and supplies at 71% and labor costs at 65%, six points apart.

Cost of goods and supplies was cited as a financial pressure by 71% of respondents and labor costs by 65%, according to Hotel-Online.

Further down the list, 50% of respondents cited utility and energy costs and 43% cited insurance premiums, according to the AHLA release.

AHLA president and CEO Rosanna Maietta said in the release that rising insurance and energy expenses, together with workforce shortages, are real operational challenges for hotels. She tied workforce readiness to the country's ability to host global events such as the World Cup, according to Hospitality Net.

Higher pay is spreading, and the housekeeping gap is not closing

The staffing picture has a longer paper trail. Hotel Dive senior reporter Jenna Graber reported in February 2025 on an AHLA survey run with hiring-software partner Hireology between Dec. 6, 2024, and Jan. 3, 2025, in which 65% of hotels said they faced labor shortages and 9% called themselves severely understaffed. A similar AHLA study published in June 2024 had put those figures at 76% and 13%.

In that early-2025 survey, 71% of hotels had openings they could not fill, down from 79% the prior June, and housekeeping was the largest single shortage at 38%, Hotel Dive reported. Some 47% of hotels were offering higher wages at the time.

By February 2026, AHLA's Front Desk Feedback survey had that wage figure at 70%. The earlier survey was conducted with AHLA partner Hireology between Dec. 6, 2024, and Jan. 3, 2025, so the two figures come from separate surveys rather than a single time series.

Higher wages were not the only incentive on the 2026 list. Flexible scheduling and hotel discounts each came in at 54%, and enhanced benefits at 31%, per the AHLA release.

The cost side of that trade has been building for years. John Smallwood, CEO of call-center and virtual-agent vendor Travel Outlook, wrote in Hotel Technology News in September 2022 that total labor costs had climbed to more than 50% of hotel expenses through gross operating profit, a vendor's figure and a dated one, but consistent with the pressure owners keep reporting. Hotel Dive also cited CoStar data showing that higher labor costs weighed on hotel profitability in 2024.

Housekeeping accounted for the largest share of shortages. In Hotel Dive's report on the earlier AHLA and Hireology survey, 71% of hotels said they had job openings they were unable to fill, and the largest share of those shortages, 38%, was in housekeeping.

Flat demand leaves cost as the margin lever

On demand, 39% of respondents expected 2026 to be roughly level with 2025, 29% expected somewhat stronger and 6% expected much stronger, according to Hospitality Net.

Nearly 20% of applicable properties reported bookings below expectations for 2026 when the survey was taken in late February, months before the World Cup, per Hotel-Online. Many hotels were only beginning to track early booking trends at that point, according to the same report.

Fluctuating demand and occupancy ranked third among pressures at 59%.

Numbers to bring to the 2027 hotel budget meeting

• Cost of goods and supplies: cited by 71% of owners, the most frequently named financial pressure in AHLA's 2026 survey.
• Recruiting incentives: 70% of hotels offer higher wages, 54% flexible scheduling, 54% hotel discounts and 31% enhanced benefits, per AHLA.
• Vacancies by department: Hotel Dive's report on the earlier AHLA and Hireology survey put the largest share of shortages, 38%, in housekeeping.
• Utilities and insurance: 50% of owners cited utility and energy costs and 43% cited insurance premiums.
• Demand outlook: 39% of respondents expect 2026 demand to remain relatively stable compared with 2025, 29% expect it to be somewhat stronger and 6% expect it to be much stronger.