Japan reopens to the world, but its hotels aren’t ready

As Japan reopens to global tourism, its hotel industry faces a problem shared by many countries in the West: staffing shortages.

Japan plans to reinstate visa-free travel to dozens of countries, including the U.S., Tuesday after more than two years of stringent border controls to combat COVID-19. The country plans to lean on tourism to revive its economy, according to a Reuters report. But Japan's travel economy faces a similar predicament that hotel owners in the U.S. know all too well.

The labor pool simply isn't large enough to fully staff Japanese hotels as they plan to welcome back more travelers from around the world.

Nearly 73% of hotels in Japan reported a shortage of workers in August, according to data from market research firm Teikoku Databank that was cited in the Reuters story.

The research shows the problem worsening, as only 27% of hotels reported a staffing shortage a year ago. However, part of that is likely from hotels being able to better manage smaller levels of tourism compared to this week with borders reopening.

However, the root of Japan's hospitality staffing shortages might sound familiar to American hoteliers.

Hotel workers found better wages and working conditions in fields beyond hospitality during the pandemic, and it's likely going to be an uphill battle wooing those workers back. That's a global trust problem, as hotel companies and individual property owners quickly laid off staffers during the early days of the pandemic amid so much uncertainty regarding travel demand.

Many of the companies laying off employees were caught off guard as demand quickly surged back amid loosening travel restrictions. Suddenly, those laid-off workers were desperately needed, but who wants to work for an industry that is quick to issue pink slips?

"The baggage we carry as a result of laying off so many people in the pandemic … that is a hard one to overcome," David Kong, former CEO of BWH Hotel Group, said at a New York University hospitality conference last year. "People always feel like you're going to abandon them in a crisis and there's no safety net."

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Another factor driving workers away stems from the fact that the hotel industry historically paid lower wages than other industries like retail. That put pressure on hotel owners to pay more to win workers back.

"The hospitality industry is very infamous for low wages, so if the government values tourism as a key industry, financial support or subsidies are probably needed," an unidentified tourism consultant told Reuters.

While it isn't clear what kind of financial life raft Japan's government will send the travel sector, the country did offer some support to working conditions.

Last week, the Cabinet Secretariat of Japan approved a hotel regulation change where staffers can deny entry to guests who don't comply with preventative measures — like wearing a mask — in the event of an outbreak of new coronavirus cases.

Back in the U.S., which has been largely open for international tourism since last fall, hotel owners are still reporting it is difficult to win back workers.

Eighty-seven percent of respondents in a survey by the American Hotel & Lodging Association, the hotel industry's leading trade group, said they were dealing with staffing shortages — 36% severely so.

If there is one lesson for Japan amid its hotel labor shortage, it's that this is a problem that isn't easily fixed.