- September 8, 2021
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Most of us are far too familiar with “Help Wanted” signs, reduced hours and limited service at our favorite restaurant and hotels across Michigan. These signs are indicators that the hospitality industry is still trying to piece itself back together after extensive and prolonged restrictions robbed it of its very essence.
A year and a half after Michigan restaurants were ordered to close their dining rooms, and most indoor gatherings were prohibited and travel ground to a halt, the decimated hospitality industry has shown some promising signs of renewal. The consumer data is clear that many of us missed dining at our favorite restaurant, and the resurgence of leisure travel has been noticeable in our many coastal and resort towns this summer.
A recent statewide survey the MRLA conducted, however, suggests that the reemergence of COVID-19 — along with unprecedented workforce shortages and significant inflationary pressures — has left the industry, especially its small and independent operators, vulnerable and in need of federal and state aid to endure the challenging months ahead.
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Nearly 90% of restaurants and hotels claim that they are operating with inadequate staffing to meet consumer demand. More than 85% of full-service restaurants are reducing hours of operation, and 80% of hotels are limiting room inventory because they lack adequate staff to turn over rooms for new guests. And despite double-digit wage increases in restaurants and hotels in 2021 and unprecedented signing bonuses for many, workforce challenges remain paramount.
The Restaurant Revitalization Fund certainly helped beleaguered restaurants, but far less than half of qualified applicants received funding, leaving over 5,000 Michigan restaurants high and dry. The hotel industry has not yet been fortunate enough to secure industry-specific funding, and the loss of over $1 billion in revenue last year means many Michigan hotels remain substantially behind on loan payments to the bank.
A recent consumer survey from the National Restaurant Association shows that 19% of adults have once again stopped dining indoors at restaurants, and 37% say they ordered takeout or delivery instead of going out as a direct result of growing COVID-19 concerns. This doesn’t bode well for the changing season and rising delta variant in Michigan.
To put it bluntly: to retain any level of profitability during this tenuous transitional period and to stave off another round of job-killing, dream-crushing closures, the industry needs its elected leaders in Michigan and in Washington D.C. to finish the job and provide much-needed bridge capital to see them through the storm.
The existential challenges for the hospitality industry are not yet behind it, which is why it is so important for Congress to pass the Save Hotel Jobs Act and pass a targeted round of much-needed Restaurant Relief Fund grants to those small restaurants most in need.
In Michigan, it is long past time for the governor and the Legislature to appropriate the American Rescue Plan Act (ARPA) signed into law by President Biden in March. The ARPA allocated $350 billion to states, local and tribal governments to address the fiscal impacts of the COVID-19 pandemic. Of this, Michigan receives $10.1 billion, with $5.7 billion going to the state and $4.4 billion distributed to several cities and counties. The ARPA stipulates quite clearly that 25 percent of those funds be devoted to hospitality industry relief efforts.
The intent of Congress and President Biden is unmistakably clear: The ARPA recognized that the hospitality industry has been disproportionately impacted by the pandemic and specifically crafted the bill to target state and local relief to devastated travel, tourism, and hospitality professionals.
This is a generational opportunity for the State of Michigan and its many great municipalities to alleviate the economic losses sustained through the pandemic in the hospitality and tourism industries. As the state’s second largest private employer, representing nearly 1 in 8 jobs and nearly 10% of the state’s total economic output, Michigan’s success is inextricably tied to the success of our hospitality and tourism industries.
The MRLA provided elected leaders a public policy roadmap to restore Michigan’s hospitality industry through the provision of thoughtful immediate relief, the promotion of a safe environment for Michiganders to dine and travel and how to strategically invest in hospitality workforce development, recruitment and retention.
Michigan’s hospitality industry is the industry of opportunity and was first to step up for its communities when they were in need. It’s time for our elected leaders to do the same.
Justin Winslow is the president and CEO of the Michigan Restaurant & Lodging Association (MRLA), which represents over 5,000 Michigan foodservice and lodging establishments. . For more information, visit www.mrla.org and www.detroitrla.org.