Hospitality grapples with specter of mass deportations

Note: This story first appeared in Travel Weekly

NATIONAL REPORT – As the Trump administration intensifies immigration enforcement efforts and expands its deportation powers, U.S. hotels and other hospitality businesses are assessing their vulnerability to subsequent workforce disruptions.

Industry insiders, however, remain divided on the effect mass deportations could have on hotel operations.

According to 2022 data from the Center for Migration Studies of New York (CMS), the accommodation and food services industry ranks as the second-largest employer of undocumented workers in the U.S. after construction, with approximately 880,000 workers.

In New York state alone, CMS estimates include 9,200 undocumented waiters and waitresses, 9,100 food preparation workers and 16,800 cooks.

The group’s industry classification of “accommodation and food services,” however, doesn’t distinguish between restaurant workers and those working in hotel-based food service operations.

Over the last four years, illegal immigration was three times the level of previous administrations, and I don’t think any of us would say those were great years for labor in the industry. We had record labor tightness and high labor inflation. What’s intuitive may not be the actual outcome.

Elie Maalouf

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Peter Ricci, director of the hospitality and tourism management program at Florida Atlantic University, disputes the extent of undocumented workers in the hotel sector.

“In my entire career of 30-plus years, I have never heard of any owner or operator knowingly employing someone who did not have legal authorization to work in the United States,” said Ricci, adding that the eVerify system and other procedures enable employers to confirm employment eligibility. “I feel that the undocumented claims are overstated and have been for decades.”

But Matthew Lisiecki, senior research and policy analyst at the CMS, argues the situation is far from straightforward. For example, some workers may have temporary protected status or pending asylum claims that enable them to work legally but still leave them vulnerable to policy changes.

“We just saw [that] the Trump administration basically canceled the temporary protected status for anyone from Venezuela,” Lisiecki said, highlighting how quickly work authorization status can shift.

Looking at the broader economic picture, Lisiecki also warned that these measures could further strain an already tight labor market.

“In an industry where there are already labor shortages, deporting or driving out of their occupations and their ability to work hundreds of thousands of workers does not seem to be a way to address those labor shortages,” he said. “And if the hospitality industry loses a significant percentage of its workforce, it doesn’t seem that there's a legion of people waiting in the wings to fill those roles.”

The topic of potential deportations emerged as a key concern at the Americas Lodging Investment Summit (ALIS) Law conference in Los Angeles in late January.

Yariv Ben-Ari, chair of the Real Estate Hospitality Practice at New York law firm Herrick Feinstein, attended the conference and said that immigration policy and potential mass deportation impacts “seemed to be at the forefront of people’s minds.”

“While we have not yet seen mass deportation, that is on our minds, and there is a concern [about] what happens if that comes,” said Ben-Ari, adding that hotel operators are particularly worried about potential staffing shortages in housekeeping, food and beverage service and other roles.

“If we don’t have enough folks to do room service or maid service, [hotels] just won’t supply those services every day, similar to what happened during the pandemic,” he said. “And we may see that people who have previously worked at hotels and went to work elsewhere will come back, because the hotels will be willing to pay more just to cover the shortage.”

These potential wage increases could affect consumer costs.

“That expense is going to be passed on somewhere,” Ben-Ari said.

Some industry executives, however, suggested that immigration policy changes may not significantly affect hotel staffing levels. During a panel discussion at the ALIS conference, IHG Hotels & Resorts CEO Elie Maalouf used recent history as a counterpoint.

“Over the last four years, illegal immigration was three times the level of previous administrations, and I don’t think any of us would say those were great years for labor in the industry,” Maalouf said. “We had record labor tightness and high labor inflation. What’s intuitive may not be the actual outcome.”

While the scale of workforce disruption remains to be seen, many hoteliers aren’t waiting to prepare.

“We’re all kind of trying to find our way forward with it,” Ben-Ari said. “We don't necessarily know the scope of it, but we understand that it’s going to be a challenge going forward.”