As we sit here in Q4, waiting for the U.S. hotel real estate market to truly heat up, I am fielding many calls each week with a similar refrain; individuals are seeking growth, more responsibility, new experiences, and/or greener pastures. They are also looking for clarity on the overall job market after nearly 24 months of minimal activity.

In many ways the hotel real estate job market can be described analogously to the hotel real estate market – stagnant. From an investment and development standpoint, fewer hotels on the market means fewer people are needed to source, underwrite, and manage hotel deals. The dearth of hotel transactions has kept portfolios stable in size, not justifying the hiring of additional asset managers for ownership groups. However, layoffs have also not been prevalent. Companies have left vacant positions unfilled or back filled with more junior talent. Firms seem to realize that the market will heat up again sometime in the near future and do not want to be left understaffed as happened in late 2021/early 2022 during the last surge investment activity. With hotel profitability plateauing, companies are also cautious of hiring too early. As a result, the current environment exists where firms might be interested in hiring additional talent but lack any urgency until they feel it is closer to the commencement of the next cycle, which seems likely in the next 6-12 months. Although hiring generally slows towards the end of each calendar year, this sentiment also applied to the spring and summer months as well.

As hiring within the Hotel Real Estate space looks ready to pick up, it brings to mind a common trap companies run into when hiring talent – they treat prospective employees as if they are potential hotel acquisitions. More specifically, companies will hold out for the perfect candidate to come along rather than hiring the best fit under the circumstances. From the perspective of someone investing in real estate, this is a perfectly sound strategy. Waiting for the perfect deal to come along, rather than doing the best deal you can at a given time, is a recipe for success. However, when it comes to hiring, being exceedingly selective comes with costs.

I frequently hear similar sentiments from clients – I like him/her but not at that price, we cannot afford a bad hire, we need someone who can hit the ground running, or they’re current company just operates differently than ours. A perfect hire is generally someone who performs the same function for a competitor, and just so happens to also be underpaid. When, as is often the case, that person does not materialize in a search, companies must make the best hire possible among available options.

In my previous role within the NYC restaurant scene, I vividly remember a conversation with my General Manager shortly after our establishment’s launch. We deliberated over the prospect of introducing lunch service. While I initially saw it as an opportunity for increased, incremental revenue, my GM expressed skepticism. He pointed out the potential downsides, such as added stress for the kitchen staff, costs associated with additional menu items, and challenges of managing additional personnel. His reluctance taught me an important lesson about opportunity costs. Essentially, the time, effort, and resources invested in one option (in this case, opening for lunch) could have been better utilized to make dinner service as strong as possible. Ultimately, his concerns were validated as our talent and resources were spread thin and we never achieved the accolades and potential we sought.

In my current Executive Search career, I often reflect on this lesson. When we spend several months searching for sub-C-suite level talent, there are similar opportunity costs at play. Extended vacancies not only strain existing team members but also give the impression of instability within an organization, potentially deterring top talent. A prolonged search can give the impression of high turnover or candidates declining the opportunity. Moreover, delays in providing feedback or communication during the hiring process can leave a lasting negative impression on candidates. I’ve encountered individuals who had poor interview experiences with companies early in their careers, which influenced their perceptions of those organizations for years to come. In my field, the pursuit of a perfect hire can become the enemy of a very good hire.

Thus, while it’s essential to find the right candidate, it is also crucial to consider the broader implications and costs associated with a disjointed hiring process. Companies oftentimes forget that the recruitment and interview process can serve as a form of marketing and brand building. Real estate is not bothered by how or how long a transaction comes together, but people can be.

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