According to an article from The Wall Street Journal, shortages in hotel staff and increases in their wages may pressure hotels to pass those increases costs on to the consumer. As inflation continues to strain consumers, will they remain resilient or find alternatives?

Yahoo Finance’s Josh Schafer, Alexandra Canal, and Brooke DiPalma break down the report and what it could mean for hotel chains and consumers going forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

JOSH SCHAFER: Room rates are expected to go up in the next year as hotels try to lure staff back after the pandemic and keep up with wage inflation. And so guests could be maybe footing this bill, guys. We've seen wages for hotel and hospitality significantly increase. You're looking at the chart right there, that's hotel worker wages sitting at record highs. You see a significant move up to about $24 an hour. Previously, it was about $18 per hour before the pandemic there.

So a significant move up there. And the Wall Street Journal sort of highlighting today in a story that if wages are going up for workers, at some point that probably gets passed on to the consumer. And it's sort of interesting, because there's a little bit also getting deeper in that article talking back and forth about if consumers are willing to foot that bill and if consumers are willing to take a step down in service. And you kind of wonder, at least I thought of a little bit of a chicken and the egg here of hotels have to pay people more to try and get the right amount of staff, and then people complain that their hotel costs more and they're still not the right amount of staff. And they're paying all this money.

It just seems like something that, I don't know, post-pandemic, how many years do we want to call ourselves maybe out of the reopening, but it feels like we haven't quite figured that out yet in terms of services, right? You can still go to a hotel today, and they don't have enough staff and the experience isn't what it was five years ago. And it just doesn't seem like they've figured out--

BROOKE DIPALMA: I've had that. I've had that experience.

ALEXANDRA CANAL: I've certainly experienced that. I've gone to hotels where you have to opt in for them to clean your room. It's not just an automatic service. You need to call the front desk and say, I want my room cleaned today. And I'm sure that has to do with staffing.

I mean, it's crazy the compensation, though. Hotels collectively will pay $123 billion in compensation this year. And that's up more than 20% from 2019. So it just goes to show, you know, what happened to the industry post-COVID, and how this is an industry that's really still in recovery. I mean, we're significantly ahead of the shortages that we saw in 2021. But like we were saying, we're not fully back yet.

BROOKE DIPALMA: Yeah. Employment in the accommodation sector is still, I believe, down 9% compared to early 2020s. So we are still seeing that pullback. And then you have to keep in mind that these workers who are going to do their jobs, who are working at these hotels, some doing multiple different jobs like the Wall Street Journal highlighted, some, you know, also folding towels at the pool while also working the front desk reception.

And so at what point do these workers then say, hey, we're doing way more than what we did maybe four years ago and the same exact role, what can I get more? And so where does that fall on the hotel industry at large?

JOSH SCHAFER: It's a tough job.

ALEXANDRA CANAL: And I was going to say that.

JOSH SCHAFER: I would be asking for more money, too. If you've sat at a hotel, and we've all been behind that person in line, I mean, it's a hard thing to do to be in customer service like that for a consistent long day and have to deal with everyone with all these expectations as the prices go up for the hotels, right?

ALEXANDRA CANAL: And we've seen that across the hospitality sector in general, especially post pandemic. You know, not all of these people are returning to these jobs. And that's the issue. How do you incentivize workers to come back?