Survey: Inflation, Lack of Affordable Housing Challenge Michigan’s Hospitality Industry

The Michigan Restaurant and Lodging Association (MRLA) in Lansing today released the results of a recent hospitality industry operational survey it conducted, covering topics of workforce, inflation, commodities, housing, and supply chain issues as the industry continues to rebuild following two years of pandemic-related troubles.
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Close-up of waiter serving hamburger with French fries in a pub.
The Michigan Restaurant and Lodging Association released survey results showing that inflation, supply chain issues, a lack of affordable housing, and more are putting a strain on the hospitality industry. // Stock Photo

The Michigan Restaurant and Lodging Association (MRLA) in Lansing today released the results of a recent hospitality industry operational survey it conducted, covering topics of workforce, inflation, commodities, housing, and supply chain issues as the industry continues to rebuild following two years of pandemic-related troubles.

“While there is growing evidence that the worst is behind us, the data in this survey paint a clear picture that the hospitality industry continues to operate in a particularly challenging environment,” says Justin Winslow, president and CEO of the. “Inflation, supply chain, and an inadequate workforce combine to suppress profitability and imperil a much-needed comeback for Michigan’s hotels and restaurants.”

“We believe a targeted campaign to educate, train, and recruit a world-class hospitality workforce is needed to meet the unmet demands of our tourism-driven state and hope to partner with the governor and legislature to quickly achieve that goal.”

The results showed 80.5 percent of those surveyed are operating with insufficient labor supply to meet demand, with one in five establishments more than 30 percent below needs. This has resulted in 59 percent operating fewer hours or days, although that number is down 18 percent from August’s survey.

Virtually all, 99 percent of those surveyed, have increased wages in the last year, with 50 percent of operators increasing wages by more than 15 percent, while larger wage increases were up significantly from August.

As a result of commodity inflation, 87 percent of restaurant have increased menu prices in the last year, with most going through two price increases.

Approximately three in four — 74 percent — of hotels raised room rates in the last year, with most hikes in the range of 5 to 10 percent, but with increases greater than 20 percent coming in a close second.

In turn, 60 percent of all operators said “inadequate affordable housing” for their specific workforce was a challenge, with 89 percent of hotel operators saying so.

Profitability is reported by 62 percent of respondents, but 61 percent report a decrease in profitability over the last 6 months. Only 21 percent now report that their business is at risk for permanent closure over the next 6 months.

“We were surprised by the degree to which the availability of affordable housing is negatively impacting the hospitality workforce statewide,” says Winslow. “It would appear this issue is no longer limited strictly to tourism-centric locations, suggesting the need for a legislative solution to address this issue before it gets worse.”

The survey was conducted May 2-9 by the MRLA and included 146 responses from Michigan restaurant and hotel operators, representing over 500 locations and nearly 15,000 employees statewide. MRLA members and non-members were both presented the opportunity to complete the survey.

A copy of the survey and its findings can be accessed here.

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