USA 2025: Hospitality Hits Record Employment Amid a Deepening Labor Crisis
The U.S. hospitality industry entered 2025 with a striking contrast. Employment has reached an all-time high, yet the labor market behind this record is more fragile than at any point in recent years. These findings come from the newly released Hospitality Labor Report, a national study outlining the challenges facing hotels, restaurants and service operators across the country.
Record employment with crisis-level turnover
The report shows that more people work in hospitality today than ever before — but turnover rates remain catastrophic. Hotels and restaurants face 70–80% annual turnover, while fast-food establishments regularly exceed 100%.
Hiring times have slowed, retention has become the main determinant of service quality, and labor is now the industry’s most critical strategic resource.
Sharp wage growth and a new wage baseline
Between 2020 and early 2025, average hospitality wages jumped from $16.84 to $22.70 per hour, marking one of the steepest increases in modern labor history. Wages have since stabilized, forming what analysts call a “reset baseline” — a new normal for the industry.
Despite this stabilization, labor costs continue to outpace revenue growth, particularly for independent operators, significantly pressuring profitability and accelerating structural change.
Las Vegas: the nation’s hospitality union laboratory
The report highlights a major shift in Las Vegas. Every major resort on the Strip now operates under a union contract, with wages set to rise 32% by 2030.
The city is described as a proving ground for the future of service employment in America, setting standards for predictable staffing, structured wage increases and narrowing the gap between frontline workers and executives.
Immigrant labor: the backbone of hospitality
Hospitality relies on immigrant labor more than any other U.S. sector. One in three workers in the industry is foreign-born, with even higher concentrations in New York, Miami and Los Angeles.
Essential roles — housekeeping, kitchen positions, support roles — depend on continuous inflows of migrant workers. New visa restrictions, rising fees and slow processing times are creating immediate operational challenges.
Technology as a multiplier, not a replacement
Contrary to fears of automation, the report underscores that technology enhances workforce performance; it does not replace it.
Operators with robust onboarding systems, digital scheduling, cross-training programs and internal mobility outperform those relying solely on headcount recovery or automation.
A turning point: workforce as a strategic asset
The report concludes that the next decade will reward companies that view employees not as a cost but as a long-term strategic investment.
Strengthening corporate culture, building stable teams and supporting career progression will determine which brands grow — and which face ongoing churn and rising expenses.
Analysts International Investment emphasize that U.S. hospitality is undergoing a structural shift rather than a temporary disruption. Labor retention, wage dynamics, the influence of migrant workforces and the unionization model emerging from Las Vegas will define competitiveness. Over the coming years, a company’s ability to build and sustain teams will become as important as financial metrics like ADR or RevPAR.