In the post-pandemic recovery and restructuring phase, the global hospitality industry in general, and Vietnam in particular, is witnessing a major shift in human resource structure. While the workforce was previously dominated by Millennials, Gen Z is now becoming an increasingly significant proportion of staff in hotels, resorts, restaurants, and tourism businesses. This is not merely a change in the age of the workforce, but also a strong shift in career mindset, job expectations, and corporate operational culture.

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In the hospitality industry – a sector known for high pressure, long working hours, and high turnover rates – the emergence of Gen Z presents unprecedented opportunities and challenges for hotel managers.

Gen Z is Redefining the Hospitality Workplace

According to Pew Research Center, Gen Z are those born between approximately 1997 and 2012, following Millennials and preceding Generation Alpha. This is the first generation to grow up entirely in an environment of strong internet, smartphone, and social media development, and are therefore often called “digital natives”. Meanwhile, McKinsey & Company states that Gen Z are not only tech-savvy but also a workforce with a pragmatic mindset, prioritising personalisation, transparency, and social values such as diversity, sustainability, and mental well-being. McKinsey's “True Gen” report suggests that Gen Z's core behaviour revolves around a “search for truth” – the need to find authenticity in their work, brands, and living environment.

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According to a report by Deloitte Global, by 2030, Gen Z and Millennials will account for approximately 74% of the global workforce. Among them, Gen Z is considered the generation that highly prioritises work-life balance, mental health, and personal values, rather than solely focusing on income or management positions. (Deloitte) Unlike previous generations, Gen Z does not view “long-term commitment” as a measure of career success. They are willing to leave a company if the work environment does not align with their personal direction, lacks development opportunities, or creates prolonged pressure. The Deloitte 2024 report shows that nearly 50% of Gen Z have rejected jobs or companies that did not align with their values. (Deloitte)

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This creates a significant paradox for the Hospitality industry. While hotels and resorts require staff stability to maintain service quality, Gen Z prioritises flexible career experiences, rapid learning, and a positive emotional work environment over traditional stability.

Hospitality is an industry heavily impacted by the “Gen Z shift”

The hotel industry is characterised by 24/7 operations, high work intensity, significant emotional pressure, and continuous customer interaction. After the COVID-19 pandemic, the labour shortage in the accommodation and tourism sector became even more pronounced. According to various reports from Savills Vietnam and Vietnam Report, the Vietnamese hotel market is strongly recovering in terms of occupancy and tourism demand, but faces a significant gap in high-quality personnel, especially in direct operational roles. This is also the group where Gen Z is increasingly represented.

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The shift of Gen Z is not only reflected in turnover rates but also in how they approach their careers. Gen Z tends to:

  • Prioritise a flexible and positive work environment.
  • Value company culture and personal values.
  • Desire a clear development path in the short term.
  • Require regular feedback from management.
  • Show greater concern for mental health and comprehensive well-being.

According to a survey by Decision Lab on young worker trends in Vietnam, Gen Z workers are highly sensitive to Employee Experience, especially regarding factors related to the work environment, recognition, and skill development opportunities. Meanwhile, Hospitality is an industry with a high burnout rate due to shift work, revenue pressure, and continuous service demands. The disparity between Gen Z's expectations and traditional management models is creating a significant gap in human resource operations.

High turnover is no longer a personal issue but a strategic challenge

One of the most serious current issues is the High Turnover Rate among young workers. According to numerous international studies on Gen Z labour, work-life balance is now a top priority when choosing a job. Deloitte notes that most Gen Z are willing to change jobs if the current environment negatively impacts their mental health or personal life. (Deloitte) For the Hospitality industry, the cost of staff turnover is not just in recruitment. Each departure entails:

  • Retraining costs.
  • Operational disruption.
  • Inconsistent service quality.
  • Pressure on the remaining team.
  • Decreased customer experience.

Especially in the 4–5 star hotel segment, where service experience heavily depends on the quality of frontline staff, continuous turnover can directly impact revenue and customer satisfaction scores.

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However, Gen Z also presents significant transformation opportunities for the Hospitality industry. Although often perceived as “difficult to manage” or “lacking commitment,” Gen Z is actually bringing many new values to the accommodation service sector. This is a generation that grew up with digital technology, social media, and AI. They can quickly adapt to new operating platforms, digital management systems, and modern customer experience models. According to Deloitte, more than half of Gen Z now use AI in their daily work and actively learn new skills outside of working hours. (Deloitte) In the context of the Hospitality industry shifting towards a “smart hospitality” model, this is a crucial advantage. Gen Z has the ability to:

  • Quickly adopt hotel operating technology.
  • Adapt well to digital transformation.
  • Create content and build digital experiences for customers.
  • Develop a more personal and approachable communication style with guests.

Furthermore, Gen Z also pushes businesses to evolve towards more humane and sustainable practices. Concepts such as Employee Well-being, Mental Health, ESG, and Workplace Culture are no longer just media trends but are becoming actual competitive criteria in Hospitality recruitment.

What changes do hotels need to make to retain Gen Z?

The shift of Gen Z is forcing hotel businesses to completely change their human resource management mindset. While traditional management models previously focused on performance control, discipline maintenance, and operational optimisation, the more critical challenge now lies in building "Employee Experience." In the eyes of Gen Z, a job is not merely a source of income but also an environment for self-development, finding professional meaning, and maintaining mental well-being. What Gen Z desires goes beyond competitive salaries. They expect to work in a positive environment where individual voices are heard, achievements are transparently recognised, and career development opportunities are clearly defined. This is also a generation with a very high need for learning. According to Deloitte, most Gen Z are willing to invest time in upskilling if businesses provide appropriate development opportunities. Therefore, hotels can no longer maintain formal training models or vague promotion paths as before.

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One of the most significant changes is how management interacts with young employees. Gen Z does not respond well to authoritarian or rigid control models. They tend to connect better with managers who act as coaches – guiding, supporting, and motivating rather than just supervising work performance. In the hospitality environment, where operational pressure is a daily occurrence, emotional management skills and the ability to inspire are becoming as crucial as professional expertise for managers. Specifically, mentorship programmes and short-term development paths are becoming new trends in Hospitality HR management. Instead of requiring employees to "commit long-term" before being given opportunities, many businesses have started to break down development paths into short-term milestones of 6 months to 1 year. This aligns better with the Gen Z mindset – a generation that always wants to see clear and continuous progress in their work. In an increasingly competitive labour market, retaining Gen Z will no longer depend solely on salary and benefits but on the business's ability to build a flexible, humane, and opportunity-rich work environment. Hotels that understand the psychology of this new generation of workers and proactively adapt their management models early will have a significant advantage in building a stable operational team, enhancing service quality, and maintaining sustainable competitiveness in the future.

Conclusion

Gen Z is not a "difficult problem" for the Hospitality industry, but rather a signal that the labour market is undergoing profound changes. The shift of this generation is forcing hotels, resorts, and service businesses to redefine how they recruit, train, and retain staff. In the long term, this is not just an operational challenge but also an opportunity for the Hospitality industry to build a more modern, flexible, and future-proof human resource management model for the service sector. If businesses continue to approach Gen Z with an outdated management mindset, turnover will continue to increase. However, if they can leverage the strengths of this generation, Hospitality can absolutely possess a creative, adaptable, and highly potential workforce in the digital age. Contact our team of experts for consulting on Hospitality HR management solutions tailored to Gen Z labour trends and the current transformation of the service industry.

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