Hotel Industry Hit By Labor Shortage, Builders Too Affected

Hotel industry, facing acute labor shortage, is thinking of postponing their expansion policies. The builders were hopefully looking at the expansion- policies and as they are postponed they are also adversely affected.
labor shortage affects Hotel Industry

Labor shortage has a negative impact on Hotel Industry.

Low payment and long working- hours distract the workers from hotel industry. Hotel companies and government remain unable to find a proper solution for the labor shortage issue. Their efforts remain of- little- use to improve the situation. Vice Chairman & MD of Indian Tourism Development Corporation Limited (ITDCL) Mr. Lalit K. Panwar commented that the situation is glaring.

Mr. Panwar stated that hotel industry needs about 150,000 trained laborers annually. Mentioning the number of students passing out from universities, he said that at present only 50,000 trained laborers are available. It means there exists a shortage of 1,00,000 skilled laborers per annum. With the entry of foreign hotel companies, the shortage will be more.

Hotel Industry affected by labor shortage

Hotel Industry is badly affected by labor shortage.

Many foreign hotel companies plan to start up hotels in India within the next five years’ time. With this hope the builders also have started constructing hotel malls across the country. If the hotel companies remain incapable of finding required number of laborers, then they will remain unable to expand. Most of the hotel companies have expansion- plans. But they are afraid of the labor- shortage.

Welcome Group Graduate School of Hotel Administration, Manipal’s Principal Parvadhavardhini Gopalakrishnan said that the labor shortage is really a big problem for the hotel industries. Parvadhavardhini said that the hotel companies are planning of expanding up to 10,000 rooms. Yet they will be able to expand only if the labor shortage is solved. Despite the labor shortage, many hotel companies are going ahead with their expansion policies.

Expansion of hotel industry fills new hope in builders as they will be able to go ahead with some real estate developments. The expansion of hotel industry will be providing a better chance for real estate sector to grow. Besides real estate sector, many other sectors are also said to receive boost. Yet, all these depend on how the labor shortage is effectively handled by the sector.

Akshay Kulkarni, regional director of hospitality for South and Southeast Asia at real estate broker Cushman & Wakefield, said that nearly 240,000 jobs will be generated in the sector. He added that an additional 3.6 million jobs will be created further in another five years’ time. His statement was based on the Tourism Ministry’s 2010 report.

Parvadhavardhini added that the existing labor shortage will affect the hotel industry in two ways. Firstly the industry will have to pay bigger salaries and secondly these companies will have to improve training facilities by them.

Mr. Panwar said that the government, under The Hunar Se Rozghar Scheme, has trained 1,500 in 2011. Under the scheme 4,000 people were given training in 2012.

All these policies are watched eagerly by builders as they can go ahead with their hotel- mall constructions only with the industry solving labor shortage.

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