The hospitality industry confronts a wide array of HR challenges, from high turnover to rising labor costs. In an industry built around providing guests and customers with the best possible experience, it has never been more important for HR teams to ensure that they approach employee benefits and workplace culture with the same mission. When employees are engaged at work and satisfied with their benefits, this will have a direct impact on their ability to provide exceptional customer service.
Employee demands and expectations have evolved rapidly in recent years, and the hospitality industry is no exception to this trend. One-size-fits-all benefits no longer work for diverse and multi-generational workforces, and this is particularly true in an industry with such a vast range of roles and responsibilities. HR teams in hospitality must be sensitive to the fact that different employees have unique needs and concerns when it comes to benefits—it doesn’t make sense to treat housekeeping staff, event managers, waiters, or IT professionals as interchangeable. However, it is also vital not to make assumptions about employees—from their professional aspirations to their personal financial situations.
This is why flexibility and open communication are critical for HR professionals in hospitality. By providing employees with options to help them meet their individual goals and prioritizing the development of a healthy workplace culture, HR teams will drive retention, increase engagement, and drastically improve experiences for employees and customers alike.
How hospitality employees’ needs have shifted
Employees across many industries have experienced unprecedented disruptions over the past five years, but none more so than those in hospitality. As the world abruptly transitioned to remote work during the COVID-19 pandemic, hospitality employees—whose jobs revolve around providing in-person experiences—were left in a particularly difficult position. However, travel has come roaring back and the demand for real-world experiences (particularly among younger generations) has surged.
The hospitality industry struggled to keep up with whipsawing demand. According to a 2025 report published by the American Hotel & Lodging Association (AHLA), staffing levels at hotels in the United States are still significantly below where they were in 2019. A 2024 survey found that 91 percent of hotels report that hiring is challenging, and they’re particularly concerned about a lack of high-quality talent. One reason for the difficulties in finding, onboarding, and retaining new hires is the high level of stress among employees. One recent survey found that 68 percent of frontline managers in hospitality report that their teams have experienced burnout, while 64 percent say employees have left their roles for this reason.
HR teams in hospitality are responsible for reversing these trends and ensuring that employees have the support they need to manage heavy workloads while continuing to offer customers the highest level of service. This means thinking beyond the status quo in benefits and addressing each employee’s specific needs.
A new era of employee benefits in hospitality
The AHLA report found that one of the top trends in hospitality this year is the need for “cutting-edge innovations in human resources.” For example, seasonality is a major obstacle for many companies in the hospitality industry, as it leads to fluctuating workforce requirements that can cause disruptions and cultural issues. Some HR teams are addressing this issue with seasonal leaves of absence that allow employees to come and go as demand shifts. AHLA also reports that job seekers are looking for “competitive pay, flexibility, and career growth.”
MetLife reports that 70 percent of employees say “benefits that can be customized to meet their needs would increase their loyalty to their companies.” In a recent conversation with BNFT’s Josh Reinhard, Westgate Resorts’ Daniel Waite explained that the new “golden rule” for HR professionals is “Treat people how they want to be treated.” This is why it’s time for HR teams to rethink static benefits like PTO. Seventy-eight percent of American workers say they don’t use all the PTO they have earned due to the pressure to always be available, heavy workloads, guilt about creating work for colleagues, and concerns over missing professional opportunities.
This captures many of the problems with the status quo in benefits, from a lack of flexibility to unhealthy cultures of overwork that are contributing to stress, burnout, and turnover. These problems are accentuated in the hospitality industry, which already faces issues like high levels of stress and staff shortages. HR teams must adapt with a more creative approach to benefits that gives all employees the flexibility and support they deserve.
Supporting an evolving hospitality workforce
PTO accounts for a significant share of benefits compensation, but employees are leaving a huge amount of paid leave on the table. While this is a significant problem for hospitality HR teams, there are ways it can immediately be turned into an advantage. For example, convertible PTO programs enable employees to redirect the value of unused time off toward other benefits: retirement contributions, student loan payments, HSAs, charitable donations, and even paid leave banks. A recent Goldman Sachs study found that PTO conversion is one of the benefits companies are using to meet “diverse employee needs.”
Waite observed that programs like PTO conversion can help HR teams coordinate with finance departments, as the funds are already allocated. In many states, companies are required to pay out the full value of unused PTO, which creates significant unfunded liabilities. This creates a worst-of-both-worlds scenario—in some states, employees aren’t receiving the full value of their hard-earned benefits, and in others, companies are accruing substantial financial burdens. This problem is all the more urgent in hospitality, with its high level of turnover. At a time when 83 percent of employees consider work-life balance even more important than pay, hospitality HR teams can deploy flexible benefits to help them strike this balance, take full advantage of the benefits they have earned, and strengthen the balance sheet.
Hospitality HR teams are no strangers to disruption, and they’ve had to adapt many times in recent years. The teams that recognize it’s time to innovate and give their employees the personalized support they need won’t just have a more engaged workforce—they will also have more satisfied customers.
Published on Oct 21, 2025 by Rob Whalen
