Rhode Island’s hospitality industry is poised for growth in 2025, despite ongoing economic challenges, according to experts at the RI Hospitality Association’s 21st Annual Economic Outlook Breakfast.
The event, held Sept. 4 at the Rhode Island Convention Center in Providence, brought together industry professionals and leaders to discuss trends, challenges, and opportunities in the hospitality sector.
Chad Moutray, Vice President of Research & Knowledge at the National Restaurant Association, projects the U.S. restaurant industry will grow to $1.1 trillion in 2024. However, he notes this growth will occur at a slower pace than in previous years due to economic headwinds.
“Job growth in the restaurant sector has been uneven, with employment surpassing pre-pandemic levels but remaining choppy across regions,” Moutray said.
National restaurant operators report ongoing difficulties in recruiting employees, managing food costs, and navigating a slower economy. Moutray emphasized the importance of adapting to changes in consumer behavior, particularly the rise in off-premises dining options like delivery, carry-out, and drive-thru services.
Kate Mashburn, Vice President of Pinnacle Advisory Group, presented an optimistic outlook for Rhode Island’s lodging industry. The state’s hotel market is experiencing positive momentum despite global economic challenges.
“Rhode Island’s statewide RevPAR increased by 9.5% year-to-date as of July, with key markets such as Newport and Providence leading the way,” Mashburn said.
Newport’s RevPAR increased by 5.7% year-to-date, while Providence saw an 8.5% increase, reflecting sustained demand for leisure and business travel. Mashburn noted that while corporate travel remains sluggish, group and event bookings are seeing a strong recovery.
The Providence Convention Center is reporting occupancy rates of 75-77%, indicating a robust return of large-scale events to the area.
Heather Singleton, Chief Operating Officer of RIHA and the RI Hospitality Education Foundation, addressed the persistent challenges of labor shortages and rising labor costs in the hospitality sector.
Rhode Island’s unemployment rate stood at 4.5% in July, near the national average of 4.3%. However, the industry continues to face heightened competition for talent.
Singleton emphasized the importance of employee engagement and well-being in retaining workers. She cited a recent Gallup survey showing that 20% of employees worldwide experience daily loneliness, and employee well-being, especially among younger workers, has declined over the past year.
To address these challenges, RIHA is focusing on workforce development initiatives. Singleton highlighted the association’s Cook Apprenticeship Program and other efforts to recruit and retain hospitality employees.
“Training and development programs are crucial to meeting the industry’s evolving needs,” Singleton said.
Farouk Rajab, President and CEO of the RI Hospitality Foundation, underscored the importance of the insights shared at the event for planning ahead in 2025.
“Despite the economic headwinds, the hospitality industry in Rhode Island continues to demonstrate resilience,” Rajab said. “We are committed to supporting our members through training, resources, and strategic guidance.”
The event highlighted three key areas of focus for the hospitality industry in the coming year:
- Restaurant Industry: Projected growth of $1.1 trillion in 2024, with challenges in labor recruitment and food costs.
- Lodging Sector: Strong performance in Rhode Island, with growth in RevPAR across major markets. Group travel and corporate demand are expected to drive further recovery into 2025.
- Workforce Development: Labor shortages and rising costs remain significant concerns. Training and retention programs are critical to addressing workforce gaps.
As the hospitality industry in Rhode Island looks toward 2025, the outlook remains cautiously optimistic. While economic challenges persist, the sector’s resilience and adaptability continue to drive growth and innovation.
The RI Hospitality Association, with more than 900 foodservice, hotel, vendor, and other hospitality members, remains committed to being the voice of the industry in the state. As the sector navigates the complexities of a changing economic landscape, RIHA’s support and guidance will be crucial in helping businesses thrive in the years to come.
