The Swedish hospitality industry is hurtling toward a critical labour shortfall that threatens not only its growth trajectory but the very quality of service it delivers. According to a landmark report from the Swedish Hotel and Restaurant Training Council (UHR), the sector must recruit 137,000 new employees by 2028 to offset retirements, sustain current operations, and accommodate projected expansion. Without urgent intervention, experts warn, Sweden’s tourism and hospitality ecosystem could face severe degradation in service standards, customer satisfaction, and economic contribution.
For major operators like BWH Hotels—which manages 136 properties across Sweden under the Best Western, Sure Hotel, and WorldHotels brands—the staffing crunch is not a distant forecast but a daily operational reality. “We hire around 700 people annually, and even that isn’t enough,” says Johan Michelson, CEO of BWH Hotels, in an interview with Realtid Perfect Weekend. “The gap between demand and available labour is widening by the month.”
The Hidden Cost of Turnover
Recruiting isn’t the only challenge—retention is the deeper crisis. Onboarding a single new employee costs approximately SEK 10,000 in training, orientation, and lost productivity before they become fully operational. For BWH Hotels alone, this translates to over SEK 7 million per year spent merely on integrating new staff—money that could otherwise be invested in innovation, employee development, or service enhancement.
“The issue isn’t finding people—it’s keeping them,” Michelson explains. “Hospitality is often a first job for young entrants to the labour market, offering roles in reception, housekeeping, or food service. But high turnover forces owners into a lose-lose dilemma: hire at great cost or shoulder the burden themselves.”
This cycle fuels a downward spiral: understaffing increases pressure on existing teams, leading to burnout and further attrition. Compounding the problem is fierce competition from sectors like retail, which—bolstered by more generous unemployment benefits and higher weekend/evening pay—has lured away a generation of potential hospitality workers post-pandemic.
“After 2020, many never came back,” Michelson notes. “They found better compensation elsewhere for the same unsociable hours—and we simply can’t match those wage structures without jeopardizing our margins.”
Technology Is No Panacea
While automation and AI are transforming many industries, Michelson is unequivocal: “AI won’t make beds.” Though digital tools can optimize back-office functions—such as reservations, inventory, or customer communications—the core of hospitality remains stubbornly human.
“Robots that clean bathrooms and remake beds are still science fiction,” he says. “In fact, as guests demand more personalized, high-touch experiences, the need for skilled, empathetic staff may actually grow.”
Moreover, Michelson warns of a broader societal shift: a declining cultural emphasis on work as a source of purpose. “We’re hearing more talk about ‘not working’—but work gives meaning. In hospitality, human connection is the product. Without people, there is no service.”
Policy Measures Fall Short
Recent government efforts to ease employer contributions have been welcomed but deemed insufficient. “Temporary relief lowers the barrier to hiring, but it doesn’t solve the structural problem,” Michelson argues. “What we need are long-term strategies: clear career pathways, stable scheduling, professional development opportunities, and a rebranding of hospitality as a viable, rewarding profession—not just a stopgap job.”
He emphasizes that the industry must better articulate its unique value proposition: dynamic environments, rapid responsibility, international exposure, and real mobility. “You can start at the front desk and end up managing a hotel—or even a chain. But we haven’t done enough to tell that story.”
A Sector at a Crossroads
The stakes extend beyond individual businesses. Tourism contributed over SEK 400 billion to Sweden’s GDP in 2024 and supports hundreds of thousands of jobs nationwide. A failure to address the labour gap could stifle regional economies, reduce international competitiveness, and diminish Sweden’s appeal as a travel destination.
UHR’s projection of 137,000 needed workers by 2028 is not hyperbole—it’s a call to action. Solutions will require coordinated efforts:
- Industry-led apprenticeships and school-to-work pipelines
- Revised wage and benefit structures that reflect the true cost of unsociable hours
- Public-private partnerships to elevate vocational training in hospitality
- National campaigns reframing service work as skilled, dignified, and aspirational
As Michelson puts it: “This isn’t just about filling shifts. It’s about preserving the soul of an industry that thrives on human warmth—and ensuring it has a future in Sweden’s economy.”
The Nordic Business Journal will continue to monitor labour trends in the hospitality sector and explore policy responses across the Nordic region in upcoming editions.