Hotels in Japan facing serious labor shortages as tourism rebounds

 Saturday, July 8, 2023

The Japanese hotel industry is struggling with serious labor shortages amid a rapid recovery in tourism demand following the COVID-19 pandemic, with concerns growing about the possibility that the sector will fail to meet the soaring demand.

The proportion of hotel operators facing labor shortages started surging in the second half of last year, according to a survey by a credit research firm.

In April, 75.5% of surveyed hotel operators said they face shortages of regular employees while 78% said they lack part-time and other nonregular workers, according to the survey, which covered about 100 companies.

Hotel operators reduced their headcounts during the pandemic. Now they face shortages of front desk, catering and cleaning staff.

It is no longer possible to attract workers who left the industry with the same wages and benefits that were offered to them before, a situation that is forcing hotels to limit reservations or reduce room availability.

The number of domestic tourists is expected to return to pre-pandemic levels this summer, according to travel agency JTB.

But a Teikoku Databank official said there is a possible slowdown in the pace of recovery (in the hotel industry) due to its failure to satisfy demand.

At a time when the tourism industry is facing an urgent need to improve operational efficiency, the Japan Association of Travel Agents will shortly start using a system aimed at improving communication between hotels and travel agencies.

The system will unify communication on basic data such as room types and check-in times that had been handled separately. It will also share information in the event of a natural disaster.

The system will reduce the amount of work significantly, a JATA public relations official said. The association is considering making the system available in multiple languages to deal with inbound tourism demand.

The labor shortages in the tourism industry stem from lower wages than in other sectors and uncertainty about the future, analysts said. The tourism industry is even struggling to hire new graduates.

Hiroyuki Takahashi, JATA chairman and JTB chairman, said that “we have to show the industry’s growth potential,” expressing a sense of crisis.

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