Additionally, hotels often have high turnover rates which means they need to keep their labor costs low in order to remain profitable. Finally, since most hotels operate on tight budgets and margins, they may not be able to offer higher wages even if they wanted too.

Hotel salaries are traditionally low due to a combination of high labor supply, low entry barriers for many roles, and the industry’s narrow profit margins. Hospitality is a labor-intensive sector where payroll is often the largest operating expense; to keep room rates competitive, hotels frequently lean on a workforce of "rank and file" employees who may not require advanced degrees. Furthermore, the industry relies heavily on seasonal and part-time staff, which drives down the average wage. Historically, many service roles have been supplemented by a "tipping culture," which allows employers to pay lower base wages under the assumption that guests will bridge the gap. Additionally, the global nature of the industry means that in many regions, there is a large pool of available workers, reducing the bargaining power for higher pay. However, since the early 2020s, a global "labor crunch" has forced many major brands to start increasing base pay and improving benefits to attract and retain talent in an increasingly competitive service economy.