Labor shortages in European hospitality industry threaten hopes of tourism boost.

While the world is beginning to open up again to travel, Europe is finding it more difficult to attract staff than visitors. And, as the tourist season becomes increasingly busy, these staffing issues threaten to undermine how successful this summer can be for everyone from individual businesses to entire countries.

Despite rising EU employment rates and safeguards for workers like wage subsidies and furlough programs to help ensure employment when businesses reopen, not all hospitality staff are going back to their previous jobs. In Germany, for example, 42% of hotels and restaurants reported that members of their staff had moved to other sectors.

Some hesitancy around returning to work is COVID-related and governments are working quickly to address their safety concerns. For example, the British government expanded its daily COVID testing program to 800 workplaces.

But, these shortages are also shedding light on some cracks in the industry that began forming long before the pandemic hit.

First, the conditions for hospitality workers are often less than ideal. In many jobs, the hours are long and working in a desirable location often requires relocation. It can also be difficult to earn a livable wage or access welfare benefits. In Italy, for example, it is not uncommon for employees to be paid off the books, which not only makes it so they can be paid less, but also disqualifies them from social security.

As such, hospitality work is often thought of as more suitable for young or single people who aren’t also trying to raise a family. Even in a good year, this reduces the potential workforce.

This issue was compounded by seasonal workers not being able to take advantage of the furlough programs during the pandemic. Instead, they had to rely on traditional unemployment benefits. And while the hotels and restaurants were closed, many of these employees secured jobs in other sectors. These transitions may not prove to be permanent for everyone, but, as of now, it is hard to say when or if the staff will ever return to hospitality.

Workers have also expressed concerns around the lack of long-term prospects in the industry. Because there are so many small and independent businesses in the European hospitality sector, there are limited opportunities for career advancement. Consider that more than 2/3rds of hotels in Austria are family-run, which can make it hard for “outsiders” to secure more senior positions.

To combat these challenges, businesses and governments are getting creative. Bonuses are being offered to waiters who refer friends for jobs. Hyatt is bolstering its ranks with participants from its hiring program targeted towards high school dropouts, disadvantaged youth, and refugees. Hungary is recruiting temporary workers from outside of the EU.

But, the needle is not moving as quickly as many would like, and the pandemic is still creating challenges. Next month, the French government will rollback its furlough programs hoping to entice staff back to hospitality. However, uncertainty around COVID is discouraging some businesses from promising higher pay — which may impact whether those returning to the workforce choose to go back to their previous positions or try another sector.

And in Greece, where tourism typically accounts for 20% of the country’s economic output, workers are facing unpredictable cycles of openings and lockdowns. So, many are looking for more consistent work elsewhere.

So if European countries are banking on renewed travel to help boost their economy this summer, poor benefits for hospitality workers will need a serious overhaul, and quickly.

Danilo Diazgranados is an investor, collector, and lover of fine wines and a member of the prestigious Confrérie des Chevaliers du Tastevin, a fraternity of Burgundy wine enthusiasts.

Investor in and lover of fine wine and restaurants.