If you’ve found yourself waiting for service at a bar or restaurant recently, you’re not alone. Across the country, widespread labor shortages are creating new headaches for the hospitality industry, arguably one of the harder hit industries during the COVID-19 pandemic. The industry, already reeling from forced closures, is now finding it difficult to hire wait staff and even order food supplies. To cope with the challenges, some restaurants, capitalizing on labor saving technology, have resorted to asking customers to place their own orders and check themselves out, others are simply offering fewer services. One hotel in upstate New York, unable to properly staff its own kitchen, now offers a free shuttle to neighboring restaurants. While the strategy provides an economic boost to the local community, it also means that the hotel forgoes the opportunity to earn additional revenues. Supply chains issues also continue to hamper the ability of the industry to return to pre-pandemic conditions. With disruptions to the availability of everything from fresh produce to alcoholic beverages, restaurants and bars are having to adapt
their menus, often on a daily basis.
Perhaps most concerning for the industry is the sharp rise in costs across most aspects of the business. In an effort to attract workers, restaurants and hotels are offering higher wages, additional perks, and even paid time off. In the past. some businesses relied on foreign student labor to fill peak season summer positions, but pandemic-related backlogs in visa approvals combined with travel restrictions has meant that just a fraction of that labor pool is available, forcing companies to look elsewhere for workers. Wages that had been $12 per hour prior to the pandemic have risen as high as $20 per hour plus benefits, a cost that is crippling for small and large businesses alike. While some blame beefed up unemployment benefits for the labor crisis, others believe there may be a more permanent shift in the labor pool as individuals who had been
employed in the hospitality prior to the pandemic have moved on to industries with greater long-
term stability and potential. If this view proves to be the case, ordering our own food may become the new norm when we go out to eat.
Discussion Questions
- Have you experienced the effects of labor shortages when visiting restaurants or hotels? What is your reaction?
- What value do you place on customer service? Bearing in mind the much higher labor costs
for the industry, would you rather pay more for your food and receive pre-pandemic levels of service, or would you prefer to adopt a system of labor-saving technology and reduced in-person service to allow prices to remain closer to pre-pandemic levels? - Reflect on the possibility that the pandemic has created a long-term shift in the labor market.
Suppose there has indeed been movement away from the hospitality industry toward other, more stable sectors. What are the long-term implications of a continued tight labor market on the hospitality industry? How might it affect other industries?
Source: WSJ: Hotels’ and Restaurants’ Rebound Summer Held Back by Shortages of Everything, Photo by Michael Browning on Unsplash