🚨The U.S. hospitality workforce has fully recovered and expanded beyond its pre-pandemic peak. By 2024, the sector added +2.1M jobs versus 2020, a +23.7% increase. Restaurants, hotels, and bars are now operating at full staffing, but operators face a structurally higher cost base. Average hourly wages have surged to $22.95 (from $16.92 in 2020), a +35.6% jump. For CRE underwriting, this signals stronger service capacity but thinner operating margins in hotel and restaurant assets.
Hospitality employment: 10.96M jobs in 2024 vs. 8.86M in 2020 (+23.7%)
Average hourly wages (leisure/hospitality): $22.95 (Aug 2025) vs. $16.92 (Feb 2020) (+35.6%)
Chef employment: 182,320 in 2024 vs. 101,490 in 2020 (+79.6%)
Loan Performance. Higher payroll costs reduce DSCR cushions; pro formas must include 5%+ annual wage growth. Cap/floor assumptions should stress test labor-driven NOI drag.
Demand Dynamics. With staffing back, hotels can reinstate full-service operations. Revenue growth is less scarcity-driven, more tied to sustained travel and dining demand.
Asset Strategies. Operators must layer turnover/training costs into OPEX. Hospitality-heavy portfolios should budget for downtime during ramp-up of new staff.
Capital Markets. Lenders are pricing higher payroll into debt sizing. CMBS investors cautious: stable revenues but compressed margins mean tighter underwriting.
Labor availability up, wage costs permanently higher.
Hotels/restaurants can operate fully staffed, supporting revenue capture.
Financing models must reflect higher payroll drag.
Spread tolerance tightening for hospitality-heavy loans.
🛠 Operator’s Lens
Refi. Stabilized assets: highlight full staffing in DSCR tests; negotiate flexibility on payroll escalators.
Value-Add. Bake in training/turnover reserves (~2–3% of payroll).
Development. Pro formas: assume $22–23/hr wage baseline, not pre-COVID norms.
Lender POV. Banks expect full payroll line items; CMBS pushing for conservative RevPAR/ADR assumptions.
Hiring momentum has plateaued (+22k in Aug 2025, “little change since April” per BLS). Growth moderates as capacity is met. Watch consumer demand trends — a travel slowdown could expose margin compression. Technology adoption (kiosks, mobile ordering) will shape efficiency gains over 2026–2028.
Newsfile — “Hospitality Sector Adds 2.1 Million Jobs Since 2020” (Sept 2025). FRED — Average Hourly Earnings, Leisure & Hospitality (Aug 2025). BLS — Current Employment Statistics, Leisure & Hospitality.
showing Leisure & Hospitality Wage Growth (2020–2025)
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