Partitioning seasonal employment in the hospitality industry

Adjustment of labor to variation in demand is known to be a major tool in hotel productivity management. The pace and timing of hotel labor adjustment depends, presumably, on the characteristics of the hotel internal labor force, as well as prevailing conditions in the external labor markets. The actual adjustment process depends, however, on past experience of hotel operators and on their expectations with respect to future occupancy rates. This paper analyzes longitudinal employment adjustment trends in eight tourist centers in Israel. Five variables are employed in order to account for monthly variation in hotel employment. These are measures of foreign and domestic demand, rates of bed-occupancy, and indices of the expected monthly fluctuation and long-term trend. Most results confirm the hypothesized relationships, with R-2 ranging from 0.47 to 0.95. Only the effect of the occupancy rate was found to be inversely related to the level of monthly hotel employment. The results suggest that while hotel operators are accustomed to hiring and firing employees according to the rhythm of regular seasonal fluctuations, they are less prepared, unwilling, or unable to fully synchronize labor to demand. Major differences appear to exist among the eight local tourist centers in the way hotel operators adjust internal employment to their respective external labor markets. (C) 2000 Elsevier Science Ltd. All rights reserved.