The MRLA released new economic impact data outlining the devastation that will be caused to Michigan’s hospitality industry, the state’s second largest employer, as colder months approach if no action is taken and mandated capacity reductions remain.
MRLA says that while expanded outdoor patio seating, great weather and federal stimulus funding helped to sustain the industry throughout the summer, more than half of the hotels in Michigan remain unprofitable and nearly a quarter of the state’s restaurants do not anticipate being in business in six months.
“The hospitality industry in Michigan finds itself in a precarious position this fall as dropping temperatures and mandatory capacity restrictions indoors threaten its very existence,” said Justin Winslow, president and CEO of the MRLA.
According to an MRLA survey, 23 percent of Michigan operators (about 4,000 locations) say it is unlikely their restaurant will still be in business six months from now. 62% of restaurant operators report increased operational costs since the onset of COVID-19, mostly due to new Personal Protection Equipment and sanitization standards.
Despite leading the statewide employment gains this summer, restaurants in Michigan are operating with 1/3 fewer employees than they otherwise at this time of the year.
Michigan hotel occupancy rates are down 23.5 percent compared to last year, according to MRLA.
In response, MRLA has launched the “Don’t Leave Michigan’s Hospitality Industry Out in the Cold” campaign, including a list of common-sense public policy solutions to help Michigan’s restaurants and hotels survive the transition to a colder, less predictable fall season.
Don’t Leave Michigan’s Hospitality Industry Out in the Cold Proposals include:
- Allow Michigan’s meetings and banquets centers statewide the same access to market as restaurants at 50 percent capacity indoors with appropriate social distancing and sanitization standards
- Allow restaurants to retain the expanded capacity they gained via patios and other outdoor solutions this summer by allowing them to safely winterize those spaces while extending their temporary alcohol service permits as well
- Allow for expanded indoor capacity, both at restaurants and banquet centers if the data reported by the Michigan Department of Health and Human Services falls below a three-percent positive test rate over an extended period
- Restore Pure Michigan funding to encourage the restoration of safe travel.
- Promote and subsidize the requisite education and training necessary to earn credentials associated with the MRLA ServSafe Dining Commitment
“Michigan’s hospitality industry, through innovation and outright grit, has risen to the challenge of providing safe service for its guests and employees. The state’s own contact tracing data validates the relative safety of our operations,” Winslow added. “We have provided realistic solutions and stand ready to work collaboratively with the governor, the legislature and local leaders across the state to help safely transition this industry indoors as the season changes. We must act quickly as nearly 5,000 small businesses and well over 100,000 jobs hang in the balance.”
Restaurants statewide have been open with limited capacity since June 8.