Opinion: Michigan's hospitality industry needs saving
Beware the Ides of March, warned Shakespeare.
On March 16, 2020, the eve of St. Patrick’s Day, a once-thriving Michigan hospitality industry nearly ground to a halt. Restaurants and bars were forced by executive order to close their doors and travel was severely restricted, leaving most hotels with little to no occupancy.
Revenue dried up — nearly $8 billion lost overall — as did employment for the broader hospitality industry, which ordinarily accounts for nearly 10% of Michigan’s GDP and more than one in eight of its workers. More than one-third of a million people in the hospitality industry have been furloughed or laid off since March 16. We have already lost nearly 1,000 restaurants for good, and more than six out of 10 hotel rooms remain empty.
A way back
As Michigan’s economy slowly awakens from an induced coma, recovery for the hospitality industry is likely to be protracted. Strict social distancing regulations limit revenue opportunities and imperil profitability for restaurants. New regulations to ensure the safety of guests and employees alike, while necessary, are cumbersome and another reason why the owners of three out of every four restaurants do not believe they will be profitable over the next six months.
Companies and groups of all sizes continue to cancel meetings or conventions planned for the remainder of the year, which means the viability of both restaurants and lodging will continue to be threatened.
Despite such gloomy prognostications, I believe this industry is full of innovative and resilient women and men whose dedication to hospitality exceeds the challenges before them. To help them forge a path, the Michigan Restaurant & Lodging Association has created the Mission to Save Hospitality — a 26-point plan of creative policies, targeted incentives and regulatory reinvention to not just restore, but reinvent a brighter future for the industry.
A few highlights include:
► Cocktails-to-Go – A concept whose time has come whereby a consumer can finally get a margarita to go with their carry-out or delivery tacos.
► Social Zones – As restaurants extend to the great outdoors like never before this summer, locally enacted zones where patrons can roam freely with an adult beverage will be an essential practice.
► Enhanced Food Safety Training – Legislators should use targeted federal stimulus dollars to provide “Food Handler” training to everyone working in the industry to increase consumer confidence to once again eat at their favorite restaurant.
► Pure Michigan Funding – The legislature should enact a creative mechanism to finance the defunct Pure Michigan campaign before it is too late for the state’s second largest industry. We have ideas.
► Curb Third-Party Delivery Abuse – Third-party delivery companies enacted predatory measures during the shutdown to extract the most possible from desperate independent restaurants. It is increasingly clear reform is needed.
Whether it is finding new ways to bring the restaurant experience where and how people want it, to investing in new safety protocols that encourage consumer confidence, the goal is simple. If we can accelerate the return of revenue to the hospitality industry, we create hundreds of thousands of jobs, stimulating our local and state economy. Successful hospitality businesses pay significant local property taxes and generate over $2 billion in state sales tax each year. Defunct ones don’t.
From the onset of the COVID-19 pandemic, Michigan’s hospitality industry answered the call. Proprietors responsibly closed their dining rooms and pivoted to providing countless free meals to those working on the front lines. They shuttered their hotels and offered a safe and comfortable bed to medical workers and first responders or those who were unable to travel back home. Now, in their time of need, we are calling on our elected leaders on both sides of the aisle to focus their energy and resources to help save our restaurant and lodging industries. Please join our Mission to Save Hospitality.
Justin Winslow is president and CEO of the Michigan Restaurant and Lodging Association, which represents over 5,000 Michigan foodservice and lodging establishments.