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Bridge Michigan
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Most Michigan restaurants cut hours this summer due to staff shortages

closed sign
(Shutterstock)

Andy French knows he’s losing sales every day when his group of eight Aubree’s Pizzeria and Grills close up to two hours early.

But he’s also grateful that, so far, his restaurants can stay open seven days a week, despite workforce shortages that have his Ypsilanti-based chain operating at about 20 percent below normal staffing.

Customer demand, he said, is high.

 

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“If we could operate at full hours, we could be at 2019 sales numbers,” French told Bridge Michigan.

That situation is playing out across the state, according to a new survey from the Michigan Restaurant & Lodging Association that offers a glimpse into the industry’s struggle to rebuild business lost to the pandemic.

Restaurants and hotels have been open without state restrictions since June 22, but almost 90 percent of the operators who responded to the survey say they are scrambling to deal with peak summer demand without enough staff. 

Customers are willing to spend money, said Justin Winslow, president and CEO of the association.

While the number of meals served are not quite back to 2019 levels, “there are massive increases in check averages,” Winslow said. “People feel more comfortable spending large dollars.”

But most industry employers are struggling to keep up.

According to the survey, which was released Wednesday, staffing shortages affect:

  • 100 percent of banquet facilities
  • 97 percent of hotels
  • 89 percent of full-service restaurants
  • 81 percent of quick service restaurants
  • 67 percent of bars/nightclubs

The situation is most critical for about one-third of the state’s hospitality businesses that are operating at staff levels that they said are more than 30 percent below what is needed to meet consumer demand.

As a result, according to the survey, they’re unable to maximize economic recovery:

  • Nearly 80 percent of restaurant and hotel operators reported closing early or for specific segments during the day because of inadequate staffing. 
  • More than 85 percent of full-service restaurants are not open during all of their pre-pandemic hours because they lack staff.
  • 81 percent of hotels are limiting room inventory because they do not have adequate staffing to turn them over for new guests. 

Not being able to meet that demand is frustrating, Winslow said, after the extended closure and restrictions that affected the industry from the start of the pandemic. 

“They’re still turning people away, and closing for lunches or not opening on Sunday nights or for Mondays at all when they otherwise would be,” Winslow said.  “So there’s a lot of revenue left on the table that after being closed for a year and a half they could really use.”

Winslow said the industry is having to rebuild its workforce during its busy season for summer travel and when outdoor dining adds capacity for many venues.

The number of leisure and hospitality workers in the state inched up in July to 342,300, an increase of about 3,000, according to the state’s data. The total represents a rebound of 22 percent from a year earlier, as Michigan limited indoor dining capacity and events venues. However, the count remains about 100,000 workers below summer 2019.

Hotels and restaurants are among many industries struggling to fill openings this year. Michigan’s overall workforce is down about 200,000 people from before the pandemic, as some workers retired, had to stay home to care for children or sought new careers. 

Raising wages in restaurants is one way many are trying to attract workers, Winslow said. 

New hires at Aubree’s, for example, are earning 25 percent more than they would have two years ago, French said. That includes cooks, who may now earn $15 to $20 per hour. Across the U.S., service workers were earning 4.8 percent more this summer, according to the Bureau of Labor Statistics.

Beyond labor cost and availability, Winslow said restaurants also are dealing with higher prices on supplies and shortages — most recently items like beef and chicken — that keep their menus fluid.

The net result, he said in a statement, is that “workers are exhausted and profit margins are thin.”

Winslow said the industry still hopes that state officials will act soon on $10 billion that remains unappropriated from American Rescue Plan funding that could help the state’s still-struggling hospitality businesses.

“This industry,” he said, “has not turned a corner.”

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