Korea's hotels are full but halls are empty as industry scrambles to fix labor shortage

A bird's-eye view of Lotte Hotel Jeju [LOTTE HOTELS & RESORTS]

Hotels in Korea are experiencing dire labor shortages, especially as workers who had left the industry during the Covid-19 pandemic have not returned, while demand for accommodation services has bounced back.

In response, the government is expected to start a foreign human resources policy committee as early as next week and then vote on allowing accommodation services to hire E-9 non-professional work visa-holders after holding test runs at hotels and condos.

The quota for E-9 visa issuance in the entire service industry is set to be expanded to 13,000 next year, but if the number proves to be insufficient, the quota could be further lifted to around 20,000 people.

Visas that currently allow for employment in the lodging industry include F-4 visas, held by expatriates; D-2 visas for foreign students; and Work and Visit H-2 visas. The hotel industry argues that E-9 visa-holders, the quota for which was recently expanded, should also be allowed to be hired by hotels.

“The phenomenon of Koreans avoiding employment [in the hotel industry] has already emerged, so it is difficult to keep up with the rising demand for accommodation by tourists,” Yoo Yong-jong, head of the Korea Hotel Association (KHA), said.

The number of guests staying at hotels in Korea decreased significantly in 2020, when the pandemic started, sliding to 20.99 million from 32.32 million in 2019, according to the KHA on Thursday. It rebounded back to 32.50 million guests in 2021 and jumped to 44.79 million last year, as travel restrictions lifted.

The room occupancy rate — which is the percentage of occupied rooms at any given time compared to the total number of available rooms — also grew from 39.1 percent in 2020 to 45.4 percent in 2021, and again up to 58.8 percent in 2022.

The government is aiming to see at least 20 million tourists next year, so the number of guests booking accommodations is predicted to jump even more.

The hotel industry, however, says there is simply not enough workers to accommodate the rising demand.

There were 11,599 regular employees working at the 62 five-star hotels in Korea last year, with an average of 187 workers at each hotel. This is 21.4 percent lower than the average 238 workers that each hotel had in 2020.

According to a sample survey of 18 hotels conducted by the KHA in June 2022, hotels answered that their work force was lacking by 8.1 percent on average.

One five-star hotel in Jeju said that they were barely managing operations, even having to deploy administrative workers as greeters. The hotel has seen most of its cuts in the food and beverage services.

Though workers are given two days off per week in principle, the hotel says there are occasionally times when the work shift schedule simply does not allow for two days off, and workers are made to only rest for one day.

“The hotel industry in general is lacking in workers, but due to the regional characteristic of Jeju Island [being isolated], it is even harder to recruit people,” the hotel's general manager said in a phone interview with the Joongang Ilbo, an affiliate of the Korea JoongAng Daily.

“In addition to food and beverage services, all services in general including cleaning and managing guest rooms, cooking and greeting guests are lacking [in workers],” the manager added.

The biggest reason for the labor shortage is that the hotel industry has not been able to bring back its workers who left during the Covid-19 pandemic. Experts say that due to the harsh labor conditions in the hotel industry, which operates 24 hours day, all year round with no holidays, workers are opting to find employment elsewhere.

To make matters worse, the available, would-be workforce in the industry is also largely shrinking. The number of students enrolled in tourism-related departments at junior colleges fell from 6,696 students in 2020 to 4,703 students last year, according to the Korea Culture and Tourism Institute. University students majoring in related courses dropped from 3,751 people to 3,127, and the number of postgraduate students fell from 602 people to 270, over the same two-year period.

“Recently, there have been an increasing amount of people who do not want to work at hotels despite having graduated with degrees in hospitality management and tourism,” an industry insider said.

Many people voiced their difficulties at a hotel industry meeting presided over by Minister of Employment and Labor Lee Jung-sik on Thursday.

“The workload has been increasing after workers who were in charge of cleaning guest rooms left and new recruits were not immediately hired,” said one worker who cleaned guest rooms at a hotel in Seoul.

“It’s hard to hire additional recruits despite our offers to raise wages, pay for late-night transportation, and provide accommodation and meals,” said an employee at L7 Gangnam, a four-star hotel operated by Lotte.

“We are closely analyzing the labor supply and demand in the industry to ensure that foreign workers will be properly stationed where they are needed, and are cooperating with the authorities of related industries to flexibly consider further additions of industries in the employment permit system,” Lee said.

BY NA SANG-HYEON [kim.juyeon2@joongang.co.kr]