Trevor Simpson’s recent CoStar report illustrates the long-awaited normalization of U.S. hotel labor conditions. For the first time since the pandemic, operators are seeing a larger, older, and in many cases more skilled labor pool. Yet beneath this relief lies a deeper due diligence challenge: how do we discern between volume recovery and value improvement?
At Bay Street, we view this labor transition through the quantamental lens—where data meets intuition. Kerry Ranson’s observation that it now takes 10 days to fill roles instead of 22 is encouraging. But more telling is his emphasis on the maturity and applicable skill sets of recent hires. That shift in labor quality is an analog to a theme we often discuss with prominent art families: the rediscovery of provenance.
As we’ve heard in meetings with legacy collectors evaluating partnerships with hotel brands, there’s a growing interest in pairing human heritage with institutional platforms. As the authors of Art Collecting Today note, “Collectors are often looking not just for buyers, but for stewards of cultural memory.” The same applies to staffing: hotel teams should be viewed as curators of experience, not merely as cost centers.
The Bay Street framework encourages our portfolio operators to score staff pipelines not just by fill rate or salary efficiency, but by “experiential convexity”—how talent amplifies or limits asset-level IRR trajectories. Are staff extensions of brand equity? Can they translate design intent into service moments? Do they become “cultural signalers” in the guest experience?
The blog touches on an overlooked truth: inflation forced the industry to reprice labor—but in doing so, also realigned expectations. Gabriel Perez notes that applicants are increasingly reaching beyond their qualifications. This dynamic mirrors our art-sector conversations: as supply floods the market, not all interest is credible. As Management of Art Galleries cautions: “A gallery must learn to distinguish interest from intent, and intent from value.”
The same goes for hospitality hiring. As markets normalize, the challenge shifts from finding warm bodies to filtering for genuine alignment. It’s one reason Bay Street encourages our operators to track not just turnover, but net value retention—a metric that factors in both tenure and contribution to revenue-per-employee ratios.
Perhaps the most concerning element of the current labor landscape is the regulatory overhang. With the Supreme Court’s recent ruling enabling the revocation of temporary legal statuses for over 500,000 immigrants, hospitality is directly in the crosshairs. Nearly 21% of the industry’s workforce is foreign-born.
Bay Street views this through the lens of jurisdictional fragility. As we’ve advised our portfolio companies, supply chain reliability now includes human capital chains. In art, provenance fragility makes a masterpiece unsellable. In hospitality, workforce volatility can impair cash flows, compress margins, and diminish guest satisfaction.
We commend firms like Vision Hospitality for providing education, legal clarity, and emotional support to vulnerable employees. Culture isn’t a mood—it’s an operating advantage, especially in times of macro-political stress.
We believe the forward-looking investor must integrate qualitative diligence into the talent equation. Here’s how Bay Street’s quantamental framework is adapting:
Just as art collectors guard their legacies through intentional curation, we believe hotel investors must guard long-term returns through intentional labor strategy.
The U.S. hotel labor market may be stabilizing, but selectivity—not surplus—is the new edge. Just as great art collections thrive when placed with discerning custodians, great hotels thrive when run by teams that are more than competent—they’re curators of experience, connectors of meaning, and, increasingly, cultural stewards.
In a year when Bay Street has had repeated discussions with art families about licensing rare collections to hospitality partners, one theme is constant: hospitality must mean something.
Not everyone applying is qualified to carry that meaning. But those who are—if empowered by aligned leadership, fair compensation, and supportive infrastructure—will define the next decade of hospitality excellence.
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“The collector is not only a buyer, but a transmitter of memory. The same applies to the hotelier.” — Art Collecting Today
“It is not enough to fill the walls. One must fill the space with credibility.” — Management of Art Galleries
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Bay Street Hospitality is a diversified hotel fund series for allocators seeking quant-driven exposure across top countries, operators, and hotel tiers. The fund targets a diversified portfolio in both high-growth emerging markets and stable developed markets, optimizing risk-adjusted returns. The leadership provides structured equity and pivotal strategic guidance to hotel-related investments. The fund establishes joint ventures with best-in-class partners, focusing on deal flexibility, currency considerations, tax efficiency, and clear exit strategies.
