May 18, 2022 - Business

Staffing struggles still plague hospitality industry

Data: Michigan Restaurant and Lodging Association; Chart: Thomas Oide/Axios

Inflation and staffing challenges are suppressing the Michigan hospitality industry's recovery from the pandemic.

Driving the news: More than 80% of statewide restaurants and hotels don't have enough employees, the Michigan Restaurant and Lodging Association found in a survey released Monday.

  • Nearly 60% of businesses say they're operating shorter hours due to that lack of staffing, while the majority said they've had to cancel other lucrative amenities or services, like lunch at a restaurant or room service at a hotel.
  • Inflation is also raising costs, leading 88% of survey respondents to say they've raised prices in the last year.

Zoom out: Smaller hospitality businesses and their employees were hit especially hard nationwide during the pandemic. And restaurants have slim profit margins even when they're operating at their best — and right now they're not.

By the numbers: In an effort to attract workers, nearly all of those the MRLA surveyed said they've increased wages in the last year. The most common average wage increase was in the 5-10% bracket.

  • Some businesses also offered hiring or retention bonuses (57%), expanded benefits (27%) and made scheduling more flexible (73%).
  • But few opted to offer child care (2%).

Yes, but: Raising pay doesn't necessarily cut it right now. Even if an employee takes home more money, increasing costs of gas and other goods can mean they still see a net paycheck decrease.

What's next: The MRLA wants to create a "targeted campaign" with Gov. Gretchen Whitmer and the state Legislature to "educate, train and recruit a world-class hospitality workforce," association president Justin Winslow said in a news release.

Between the lines: Quiana "Que" Broden is the founder and owner of Kitchen by Cooking with Que, an 18-employee cafe and cooking class business in New Center. She needs eight more employees and is now back cooking in the kitchen due to the lack of staff, she tells Axios.

  • "You can't work on the vision, because you're in it," Broden says.
  • She's also seeing increased food costs: Cauliflower has gone from $1.99 a head to $6.99 a head, depending on the day. "And my price (on the menu) is not supposed to change?" she says.
  • Broden used to offer $2 taco Tuesdays, but says she had to raise prices to three tacos for $10.

What they're saying: Some former food and beverage employees have also turned to other work, Jon Coutts, managing director for the Element Detroit hotel and Monarch Club, tells Axios.

  • They're seeking more of a work-life balance and many don't want to deal with a general public that's become less patient and tougher to deal with, he says.
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