The Rhode Island Hospitality Association (RIHA) hosted its 19th Annual Economic Outlook Breakfast for hospitality industry professionals at the Crowne Plaza Hotel in Warwick, Rhode Island, earlier this week.
Industry analysts predict that by 2023, Rhode Island’s restaurant and lodging industries will continue to reshape and recover in the wake of the COVID-19 pandemic, international inflation and economic concerns, and other global factors.
This year’s panelists included Hudson Riehle, Senior Vice President of the Research & Knowledge Group at The National Restaurant Association (NRA); Rachel Roginsky, Principal of Pinnacle Advisory Group; and Heather Singleton, Chief Operating Officer of RIHA and the RI Hospitality Education Foundation (RIHEF).
According to Roginsky, Rhode Island’s lodging industry experienced an impressive rebound in 2022, experiencing a YTD RevPAR (revenue per available hotel room) of $105.94, a significant increase over the stats reported in 2021. Roginsky analyzed the lodging markets in Providence, Warwick, Newport, and Middletown. Providence saw a significant increase of 38.5% in RevPAR from 2021, but the market is still down 15.7% from 2019. Warwick also shows an increase from last year. With passenger counts continuing to increase at T.F. Green, and more conventions and events in the area, a significant decrease in unemployment and a recovering economy, Warwick’s RevPAR increased 27.2% from 2021, and has increased 18.4% since 2019.
On Aquidneck Island, Newport saw a substantial increase in RevPAR (up 14.0% from 2021, and up 22.2% from 2019). Roginsky analyzed the Middletown market, noting that RevPAR is up 21% from 2021 and 21.1% from 2019.
Heather Singleton, who spoke on behalf of RIHA/RIHEF, discussed key statistics affecting the Rhode Island labor force, as well as leisure and hospitality employment on a national scale. According to her findings, Rhode Island’s unemployment rate in July was 2.7% compared to 6.0% in July of 2021. Similarly, the United States’ unemployment rate in July was at 3.5% compared to 5.4% in July of 2021.
Since findings suggest that hospitality labor shortages and rising labor costs are not going away any time soon, Singleton’s presentation highlighted various available resources for employee recruitment and retention. Among these resources is the “Rhode Island Hospitality Jobs” website, a convenient resource for its hospitality members to post job openings and for job seekers to easily identify local opportunities in the industry through the use of a simple search tool; the RI Hospitality Association Group 401(k) Plan, established in partnership with U.S. Wealth Management; RIHEF’s Cook Apprenticeship Program; and The Rhode Island Employee Retention Credit (ERC).
Hudson Riehle addressed the economic backdrop and performance of the restaurant and food service industry nationally. According to Riehle, the industry will remain in transition throughout 2022 and 2023 national restaurant sales are projected to advance, despite strong geographic variations.
Some of this year’s biggest challenges for restaurant operators include employee recruitment, the economy, food costs and availability, sales volume, and labor costs. According to Riehle, hospitality job openings were over 1.3 million in July of 2022. The growth of labor costs is accelerating with average hourly earnings increasing by 11.1% in 2022, compared to 9.3% in 2021, 3.1% in 2020, and 3.8% in 2019.
While inflation is likely to decelerate in 2023, economic growth is expected to be more moderate. Additional national restaurant industry findings suggest that a greater emphasis will be placed upon food delivery, carry-out, drive-thru service, alcohol, new business models, cost management, value-added products, and digital services/products.