Job levels in Michigan have rebounded to 93% of pre-pandemic levels – after Michigan shed nearly a quarter of its jobs in April 2020.
Most industries are close to 100% recovered, like construction (99.8%), financial (98.2%) and professional/business (96.3%).
But there’s an outlier: Leisure and hospitality jobs.
Despite gains throughout the summer, leisure and hospitality jobs are only 81.6% recovered – by far the worst of all major industries, per the U.S. Bureau of Labor Statistics. As of August, the industry had about 354,000 employees in Michigan, about 80,000 fewer than pre-pandemic.
(Can’t see the chart? Click here.)
Restaurants and hotels have been hit from every angle.
People stopped eating out and traveling when COVID-19 cases surged. Products are more expensive because of shipping hurdles and inflation. And workers have been hard to find, as people turned to enhanced unemployment or better-paying jobs in other industries.
Once Michigan started requiring job searches for people on unemployment, some businesses started getting “ghost applicants,” where people would apply, but not answer the phone for an interview.
“The ghosting of 80 to 90% of interviews throughout the spring and summer was wreaking havoc on the industry,” said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association. “You think you have someone interested and then they don’t come, and that really sets you back.”
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Ghosting has diminished since federal unemployment benefits ended in Michigan on Sept. 4, Winslow said. One of his members has seen 50% more applications since benefits ended, he said.
Job data hasn’t been released for September yet, so it’s to be determined if the end to federal unemployment boosted jobs in Michigan.
“It’s early, but you’re seeing real traction in employment,” Winslow said, citing anecdotes.
Where have jobs been hit hardest?
Not all parts of Michigan are struggling equally when it comes to leisure and hospitality jobs.
The Metropolitan Statistical Areas of Flint, Monroe, Battle Creek, Niles/Benton Harbor and Bay City are near 90% of the leisure and hospitality jobs they had pre-pandemic. Other metro areas are hovering around 80% – like Jackson, Ann Arbor, Kalamazoo/Portage, Lansing/East Lansing and Detroit/Warren/Livonia.
The data comes from the Michigan Department of Technology, Management and Budget.
(Can’t see the map? Click here.)
(Can’t see the chart? Click here.)
Areas that had the most business travel are suffering most, Winslow said. Lots of business travel remains on hold because of COVID-19, cutting into revenue for hotels and surrounding restaurants. University towns are also disproportionately hit, Winslow said.
Certain types of businesses are also hurting more than others in the industry.
Michigan’s data breaks down jobs by full-service restaurants (where you’re served and pay after you eat) vs. limited-service eating places (like fast-food, where you pay at the counter before you eat).
In August 2019, sit-down restaurants and fast-food eateries had roughly the same amount of employees – about 152,000 each. But the sit-down places lost twice as many employees in April 2020, and still haven’t rebounded.
Michigan’s dine-in closure didn’t help, prompting temporary plummets in jobs for sit-down restaurants in spring 2020 and this past winter.
(Can’t see the chart? Click here.)
Pre-pandemic, about 55% of all restaurant sales were off-premise, Winslow said – like drive-thru, carryout and delivery. During peak pandemic, off-premise sales hit 90%. Now, it’s only back down to 80%, Winslow said.
“While it won’t likely stay that high, it just gives you a sense that the industry has transformationally changed, with more off-premise consumption just being a new reality,” Winslow said.
More restaurants are focusing on – or only offering – delivery. Even the fast-food giants are redesigning their layouts for new restaurants, offering more drive-thru lines and carryout windows and fewer dine-in seating.
"Burger King is unveiling new restaurant designs that will deliver flexibility, innovative features and convenient options for how BK food can be ordered and delivered, to fulfill changing guests demands," the company wrote in a press release.
With COVID-19 cases on the rise, Winslow said restaurants are “nervous” for the winter. Outdoor dining is less realistic and businesses worry people won’t want to dine indoors.
Restaurant Revitalization Funds helped – Michigan businesses got nearly $800 million in aid. But funds were limited and 5,309 of the 8,614 Michigan restaurants that applied were denied.
“If you got that, you probably have a cushion to endure an unstable fall,” Winslow said. “But if (not) … it’s an uncertain fall and winter ahead ... These are precarious times for the industry.”
Michigan still has billions of dollars left in federal stimulus money to dole out, and Winslow says the leisure and hospitality industry needs help – they’re “not out of the woods, by a longshot,” he said.
The long-term solution hasn’t changed, though: Eliminate COVID-19.
About 78% of restaurants said demand for indoor dining has declined in recent weeks due to the delta variant surge, per a National Restaurant Association survey.
Among Michigan restaurants surveyed, only 58% saw such a decline – as COVID-19 numbers have been lower in Michigan, but are catching up.
“We’re going to plod ahead and hope for a quick end to the delta variant in Michigan,” Winslow said. “That’s obviously the only way people will start feeling comfortable permanently going out for indoor dining.”
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The Link LonkOctober 04, 2021 at 07:00PM
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The pandemic hit Michigan restaurants hard – here’s where it hit worst - MLive.com
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