Hotels in the country are grappling with chronic staff shortages, pushing employees into more labor-intensive tasks and leaving many wondering whether adjustments to foreign employment regulations could mitigate the problem, according to industry observers, Wednesday.
The issue arose as the country's MICE (meetings, incentives, conferences and exhibitions) industry began booming after an end was declared to the COVID-19 pandemic. The shift led to higher demand for hotels and lodgings, including visitors from overseas. The Korea Immigration Service said monthly visitors to the country spiked from 464,000 last January to 1.28 million last October.
It is difficult for hotels to hire staff because of the typically heavy workloads and comparatively low compensation. Consequently, despite the rising demand for check-ins here, some hotels are apparently suffering from worker shortages and, as a result, cannot cater to patrons with quality services. It has led to some establishments worrying that the predicament might lose them business.
According to the Korea Hotel Association, a large portion of people who formerly worked at hotels before the pandemic in 2020 have not returned. Last year, 11,600 employees were counted as full-time employees at five-star hotels in the country nationwide — 187 employees per hotel. Compared to 2020, the figure is down by 21 percent.
The unique working environment of hotels requires comparatively more hands than other service sectors, which also deters people from entering the industry. A larger pool of employees means less revenue to share for each individual. According to an analysis by the Bank of Korea from 2022, hotels spend an average of nearly 11 percent of their entire revenue on wages. Other industries average less than 5 percent.
To resolve the worker shortage, some within the industry are demanding the government act to establish channels for foreign staffers to fill the void. But policy remains a hurdle. The Foreign Workforce Policy Committee under the Prime Minister's Office on Nov. 27 decided to expand next year's quota for the E-9 working visa for non-professional job opportunities to 165,000, up by 37.5 percent from this year. The measure expanded quotas for other sectors as well. But it did not include hotels and lodgings, pending further consultation within the industry.
Some of the country's top-class hotels, like The Shilla Seoul, have evaded the worker shortage, according to an official from the company. But Lotte Hotels and Resorts, another market leader in the country, said its shortages have been severe. It also said hiring foreign workers not only resolves the issue but also improves the industry's image to global customers.
"Worker shortages are, right now, very serious around hotels here, regardless of their size and brand," said an official from Lotte. "Especially when it comes to global brands, they should be able to hire foreigners, not just to operate their businesses but also increase diversity among their employees. That is essential for the country's hotel industry as a whole to improve on a global level."