How to Solve Hospitality’s Biggest Issues: Labor, Costs & Compliance

Running a hospitality business today isn’t easy — you’re likely grappling with persistent labor shortages, soaring operational costs due to inflation, and the daily complexities of navigating cross-border compliance and regulations — particularly in the face of agile competitors like Airbnb and app-driven delivery services.

These challenges put hospitality leaders under immense pressure, forcing strategic decisions about staffing levels, employee satisfaction, and operational efficiency without compromising service quality.

At Deel, we’ve partnered extensively with global hospitality brands, understanding firsthand the meticulous balancing act needed to manage seasonal workforce fluctuations, international employment laws, and rising expenses.

Leveraging Deel's all-in-one platform featuring streamlined HR automation, AI-driven workflows, effortless global hiring through our Employer of Record (EOR) and contractor of Record (COR) services, and proactive compliance processes, your organization can seamlessly scale up or down, attract and retain top global talent, and reduce overhead — all while staying fully compliant across hundreds of jurisdictions.

With the right tools in your corner, you’ll improve employee engagement, streamline operations, and position your hospitality organization not just to survive — but thrive — in this intensely competitive industry.

Let’s dive into six of the biggest challenges facing the hospitality sector today and explore ways Deel can solve them.

1. Fill labor shortages and seasonal fluctuations with Deel EOR and COR

Deel’s global hiring solutions help hospitality businesses overcome labor shortages and seasonal fluctuations by giving them access to global talent and making it quick and easy to scale their workforce up and down depending on businesses’ needs.

Navigating labor shortages and seasonal fluctuations in the hospitality industry presents significant challenges. These fluctuations may arise from weather changes, increased demand during holiday periods, or specific peak seasons. Overestimating staffing needs can cause excess costs while underestimating can hinder service quality.

Deel EOR and Deel COR hiring solutions allow hospitality businesses to hire employees and contractors globally without establishing local entities or navigating HR or compliance in unfamiliar jurisdictions. You’ll gain access to a diverse talent pool and can swiftly adjust your workforce in response to organizational needs.

For example, you can easily increase your workforce with contingent workers for peak seasons, convert contractors to full-time employees if business demand plateaus, or scale back in specific areas while ensuring compliant terminations. Should you need to relocate or obtain work authorization for international talent, Deel also provides visa and immigration services.

Learn how to leverage an Employer of Record for Global Expansion and Market Testing.

2. Boost worker satisfaction, retention, and attraction with Deel HR

Deel HR streamlines onboarding and global team management, creating a consistent, welcoming experience for all employees. This strengthens company culture, boosts retention, attracts top talent, and supports long-term work arrangements.

According to SHRM and Indeed, the average organization invests at least $4,000 in each new hire. The high costs associated with acquiring new talent require effective employee retention strategies to ensure the investment is worthwhile.

Deel ensures that workers have a seamless experience from the moment they receive their welcome email, sign their contract, and embark on their onboarding journey. This includes orientation, training, ramp-up, benefits enrollment, and payroll setup.

Deel HR also has self-service functionality so employees can take control of their experience by being able to access all of their documents, work contracts, payslips, invoices, benefits, perks, and organization information from one place. This reduces friction, boosts knowledge sharing, and helps to create one source of truth.

With Deel HR, workers also receive:

• 24/7 support from dedicated HR experience teams
• Visa and immigration support if they require relocation or work authorization
• Flexible payment and withdrawal methods

Discover how Moralis doubled its international workforce while boosting team experience with Deel.

See also: Global HRIS: Why It’s the Best HR Solution for Global Teams

3. Combat rising operational expenses with Deel AI, Workflow Builder, and automations

Deel’s workflow builder, with automation and AI-powered capabilities, is designed to make your operations effortless, keep your teams lean, and keep resource expenditures within budget.

Inflation makes everything more expensive, which is a double-whammy for the hospitality industry. Not only do costs go up (such as wages, supplies, and other organization expenses), but your clientele also has less money to spend in most cases.

You can’t simply increase your prices to match the increasing costs without losing some frugal customers. Over time, this cycle can really put a squeeze on your organization, leading to empty tables in your restaurant or empty rooms in your hotel.

To offer competitive pricing while fighting inflation, you need to reduce operating costs. Automating core functions like HR, payroll, and compliance does just that. Deel’s Workflow Builder helps you work faster, with less admin, while providing a smoother experience for workers everywhere.

In just a few clicks, you can create custom workflows to automate routine tasks and communication across your organization. These include

Deel's platform also offers:

• Onboarding
• Training and performance management
• Background checks
• Workspace memberships
• Equipment and software management
• Flexible global payroll and contractor payments
• Equity management
• Offboarding

Unlike other HR systems, Deel’s Workflow Builder is free to use and specially designed for global teams. You can customize workflows for different workers, locations, and more.

In addition to the workflow builder and automations, you can use Deel AI, an AI-powered assistant integrated into the Deel platform.

With Deel AI, you can:

• Ask any question to navigate your global HR compliantly
• Keep up with all local laws and global hiring data
• Obtain instant insights from your workforce data
• Stay compliant with AI-enabled regulatory insights

By improving operational efficiency, you save your team valuable money and man-hours that can be used elsewhere to reduce the effects of inflation.

Discover how DevBase automated 20+ recruiting and HR processes with Deel.

See also: How AI in HR Boosts People Operations & Streamlines HR Processes

4. Bridge communication and skill gaps with Deel Engage

Deel helps the hospitality industry form stronger team communication, collaboration, and engagement through Deel Engage, an AI-powered people suite to manage team communication, development, and performance in one place.

The hospitality industry faces many challenges regarding internal communication. Hospitality tends to rely on many different departments, such as management, food preparation, customer interaction, and health and safety.

Ensuring such diverse teams all feel connected is no small feat. You may have a combination of salary workers, hourly workers, seasonal roles, temps, union members, and non-union employees, all with different contracts and benefit packages. Maintaining proper communication and engagement in this work environment is essential.
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With Deel Engage, you can:

• Boost collaboration and culture with HR plugins for Slack: Reduce context-switching and supercharge connections with seamless Slack HR plugins, including PTO, kudos, referrals, org charts, and more
• Measure engagement and uncover career path opportunities: Surveys let you collect employee feedback on things like career development and remote relationships so that you can boost sentiments with targeted action plans
• Bridge knowledge gaps with custom training courses: Build, manage, and track engaging training courses in minutes with our AI-powered learning management system
• Build high-performing teams with half the work: Facilitate comprehensive feedback, from 360° reviews to custom processes. Ensure bias-free performance appraisals and use OKRs and other goals for consistent team advancement
• Give your people a roadmap for professional growth: Promote role clarity and motivation by giving your people a transparent path forward with competency-based career progression frameworks. Save months of tedious work thanks to AI

Discover how reev enhances talent management, boosts the employee experience, and saves four months of HR work with Deel.

See also: How to Improve Employee Performance: 8 Actionable Strategies

5. Master multiregional laws and regulations with Deel’s Compliance Hub

Deel’s Compliance Hub helps compliance officers and compliance teams in the hospitality industry practice continuous regulatory compliance by flagging any compliance concerns or risks proactively before they become an issue.

Hospitality businesses, including hotels, restaurant chains, and tourism agencies, often expand across multiple jurisdictions, making it challenging to navigate an evolving regulatory environment. Managing local labor laws, industry regulations, business licenses, employee rights, taxes, and currency exchange becomes increasingly complex with international growth.

Fortunately, Deel’s Compliance Hub simplifies compliance efforts for multinational companies by effortlessly streamlining international hiring, worker classifications, and contract negotiations. In addition, the compliance monitor scans for regulatory changes across 150 countries to keep you out of trouble and even provides monthly workforce insights to strengthen compliance programs and support strategic decision-making.

Discover how Endeavor Labs grows its team globally and compliantly with Deel.

See also: The Key to Continuous Company Compliance in Today’s Global Landscape

6. Protect from cybersecurity threats with Deel data security

In addition to the minefield of international business law, Deel offers protection against those actively seeking to harm your business, namely cybersecurity threats.

As you can imagine, we take data security very seriously when handling payroll for thousands of companies around the world. One data breach could seriously hamper our clients’ day-to-day operations.

For this reason, we don’t cut any corners when it comes to cybersecurity. Deel adheres to the strictest data security and risk management standards in the industry. Our advanced infrastructure, comprehensive compliance certifications, and devotion to user safety are second to none.

See also: Data Privacy Compliance: Best Practices for Global Teams

Overcome challenges in the hospitality industry with Deel

Succeeding in the hospitality industry is a careful balancing act. Not only do you need to predict customer demand, but you also have to juggle the needs of your various departments to ensure your organization operates like a well-oiled machine.

By allowing Deel to take some of those needs out of your juggling act, you can significantly lighten the load of your operation and improve efficiency. Remember, Deel is more than just payroll: We offer comprehensive HR services, including cutting-edge LMS, workforce reporting, and visa support.

For hospitality companies, partnering with Deel gives you the tools you need to run a lean and mean operation that is not only more profitable but also increases your potential for growth anywhere in the world.

And that’s just the start.

Speak with a product expert today to discover how Deel can address the challenges facing your hospitality business and take it to the next level. Book a call now.