Key takeaways
- Instawork's 2023 State of Hospitality Staffing report offers a positive outlook for the sector this year.
- Businesses surveyed for the report expect higher revenue and slightly improved conditions in the labor market.
- The use of flexible labor in the sector is poised to grow, with almost three quarters of businesses planning to deploy flexible workers.
Last year was an exciting one for the hospitality sector, as a huge swing of consumer spending brought demand for restaurant meals, catered events, and hotel stays back to its pre-pandemic trend. But it wasn't all wine and roses, since the sector was still short hundreds of thousands of workers. That gap still hasn't closed completely, but the businesses we surveyed for our 2023 State of Hospitality Staffing report are looking forward to a big year all the same.
Rising revenue
We surveyed 188 businesses across the sector about their experiences in 2022 and their expectations for 2023. Overall, 63% expected revenue to rise by 10% or more this year:
That's a big number, and a little easing in the labor market may be a contributor. Last year, more than a quarter of these same businesses had to forgo at least 10% of their potential revenue because they couldn't find enough staff to meet demand:
In fact, staffing is no longer the top challenge cited by hospitality businesses – that crown now goes to inflation in prices from suppliers:
But hospitality businesses are still in a tight labor market. Though the respondents who said that attracting and retaining staff would be easier in 2023 outnumbered those saying it would be harder, 62% said it would be just as difficult as in 2022.
Flexing capacity with flexible labor
The solution for many of these businesses is flexible labor, either via Instawork or other platforms. Almost three quarters said they had used flexible labor more in 2022 than in the previous year. The share of respondents who said they planned to use flexible labor rose, too, from 66% in last year's survey to 73% in 2023.
For some of these businesses, flexible labor is also a recruiting tool. They still want to make permanent hires, and by making shifts available on platforms like Instawork they can audition new cohorts of hourly professionals. This mechanism is particularly important now, as rising prices, higher interest rates, and eroding saving are pushing some workers to rejoin the labor force or look for extra hours. Some of the people who left the hospitality sector are dipping their toes back in, and flexible work is the easiest way.
The report has much more information about how hospitality businesses are working to attract and retain professionals. Many raised pay significantly in 2022 and plan to do so again in 2023. Our business partners say repeatedly that they are willing to pay competitive rates for high-quality, reliable workers. And they also have several other tools for bringing workers back in. You can read all about it in the report.
Realtime metrics
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 2/16/2023 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
- $0.07 rise in hourly pay
- 0.6% point rise in share of short-notice shifts
- 0.3 hours rise in hours per existing worker
To receive future briefings and data insights from our Economic Research team, please subscribe below. Follow Daniel Altman on Twitter at @AltmanEcon or on LinkedIn.
Don't forget to share this post!
