Metro Detroit restaurants fight low staffing, high costs

80% of Michigan restaurants, hotels operating with inadequate labor supply according to new survey

We know the hospitality industry was hit hard by the pandemic, and now they're dealing with a new set of problems like staffing shortages and supply chain issues. The issues are laid out in a new survey by the Michigan restaurant and lodging association.

SOUTHFIELD, Mich. – The results are in; Michigan Restaurant & Lodging Association surveyed hotels and restaurants to see how supply chain issues, staffing shortages, and more are impacting the industry statewide.

The association’s President and CEO, Justin Winslow, said, “The worst seems to be behind us right now, but this industry is a long way from getting back to where it needs to be to thrive long term.”

Survey Highlights Include:

  • 80.5% operating with inadequate labor supply to meet demand with one in five establishments more than 30% below needs.
  • 59% operating fewer hours or days due to inadequate staffing, but that is down 18% from last August.
  • 99% have increased wages over the last 12 months, with 40% of operators increasing wages by more than 15% in that time period. Larger wage increases were up significantly from August.
  • 77% of operators have experienced commodity inflation in the last 12 months that is greater than 10%.
  • 87% of restaurants have increased menu prices in the last 12 months, most between five to10% and most took two increases over that period.
  • 74% of hotels raised room rates over the last 12 months, five to 10% was the range most selected, but greater than 20% was a close second.
  • 60% of all operators said “inadequate affordable housing” for their specific workforce was a challenge, with 89% of hotel operators saying so.
  • 62% report profitability right now, but 61% report a decrease in profitability over the last six months. Only 21% now report that their business is at risk for permanent closure over the next 6 months.

Winslow said they plan to discuss these numbers with elected officials. He said, “We’re going to be advocating for some of those resources to bring back the long-term success of this industry. I think we’re past the need for immediate funding, immediate support, that sort of COVID relief package type stuff, but there’s still a need to jumpstart this industry to get it back to where it was.”

Nikola’s, a barbecue restaurant in Southfield, isn’t surprised by the survey results. General Manager Velko Milosevich said the restaurant currently has limited hours because they don’t have enough staff.

“We only have six servers now as opposed to in the good old days a few years ago, pre-COVID, we had 14 people,” said Milosevich.

He also mentioned they’ve had to take items off the menu and raise prices because of inflation. He also said how difficult it’s been to find little things like Styrofoam containers.

“Your supplier doesn’t have them, so you have to go to alternative methods. You go to eBay or Amazon to find something, and it’s literally triple the price,” Milosevich said.

He said they have seen success with carryout and are grateful they can still open on a daily. Milosevich credits understanding and patient customers for helping them get through what is a difficult time for a lot of businesses.

“The customer is what keeps us going, and luckily we’re on a busy road, we have a reputation, and we just keep doing it,” Milosevich said. “Again, taking it one day at a time.”

For a look at the data MRLA gathered, click here.

About the Authors:

Megan Woods is thrilled to be back home and reporting at Local 4. She joined the team in September 2021. Before returning to Michigan, Megan reported at stations across the country including Northern Michigan, Southwest Louisiana and a sister station in Southwest Virginia.

Brandon Carr is a digital content producer for ClickOnDetroit and has been with WDIV Local 4 since November 2021. Brandon is the 2015 Solomon Kinloch Humanitarian award recipient for Community Service.