Employment Adjustment Trends in Tourism Hotels in Israel

Abstract

The paper analyses longitudinal trends of employment in the hotel industry in Israel in the years 1984–1995. The data cover two types of changes in the employment: those driven by the regular seasonal variations in demand and those caused by irregular disturbances driven by regional geopolitical events. The distinction between external and internal labour markets is adopted as the conceptual framework. It appears that the accommodation industry in Israel does not take full advantage of the abundant potential labour available in the external labour market. This is evident by the relatively low turnover of the hotels' labour force compared to the much higher annual cyclical variation in visitors' demand. The low turnover of hotel workers during the seasonal cycle is attributed mainly to their low pay rates compared to the national average. Labour adjustment as a result of irregular multi-annual disturbances is higher and more closely resembles the changes in demand. Adjustment of labour to variation in demand is found to be a major tool in hotel productivity management.