Hospitality industry bearing brunt of labor shortage

CARTERET COUNTY — Business is booming on the Crystal Coast, with the recent Fourth of July holiday weekend likely breaking all-time tourism records, but hospitality workers in particular are feeling the strain as a post-pandemic labor shortage continues.

The restaurant industry has been one of the hardest hit sectors, officials say. After a year in isolation, record numbers of people are visiting Carteret County this summer, ready to dine out to their hearts’ content. Though it’s been good for sales, Carteret County Chamber of Commerce President Tom Kies said it’s meant many restaurants are busier than ever with fewer than usual employees.

“This whole season has been really good, with huge numbers (of vacationers), but restaurants are… starting to feel it,” he told the News-Times Monday.

Mr. Kies said to give overburdened staff a break and prevent burnout, many restaurants have begun closing one or more days per week, including some that opted to close the Fourth of July and other major tourism holidays. Even fast food restaurants have cut back on hours, he said, closing earlier and opening later.

Shana Olmstead, co-owner of Floyd’s 1921 Restaurant in Morehead City, said she and co-owner Floyd Olmstead, her husband, decided early in the season to close Sundays in addition to Mondays, the one day a week the restaurant was traditionally closed. She said they opened a couple Sundays for other holidays, such as Mother’s Day, and were considering doing the same for Fourth of July, but ultimately decided against it.

“What a great thing it was for employee morale to have the Fourth of July off. It was absolutely the right decision,” she told the News-Times Tuesday.

In one high-profile instance, RuckerJohns, a restaurant in Emerald Isle, began closing Sundays to give employees a day off, and was sued by its landlord for violating terms of the lease. After gaining statewide attention, the landlord, York Properties of Raleigh, eventually withdrew the lawsuit, and the restaurant remains closed on Sundays.

Ms. Olmstead acknowledged she probably missed out on a huge night of sales by closing for the Fourth, but said her employees desperately needed the break. She said in an ideal scenario, she’d hire around a dozen more employees to keep up with soaring demand, if only people would apply.

Michele Querry, interim director for Carteret County economic development, said her office is in daily contact with employers from multiple sectors who express difficulty filling their available positions.”

“Tourism is a significant driver of our local economy and during the summer months especially, there is more demand on our hospitality industry,” Ms. Querry said in an email to the News-Times this week. 

She believes a variety of factors, some arising from the pandemic, could be driving the recent labor shortage.

“In early 2020, the hospitality industry saw almost half of its jobs disappear. Many of those workers have moved on to jobs in other industries and others are exploring new careers,” Ms. Querry said. “The coronavirus pandemic shifted where and how people work. Many employees are discovering options like working from home and taking advantage of the opportunity to work remotely.”

Crystal Coast Tourism Development Authority Executive Director Jim Browder posited another explanation. He said with the boom in tourism, there are increasingly limited affordable housing options for workers to rent, pushing people to seek employment elsewhere. 

“Unfortunately, all the stars are aligned in the wrong way when it comes to trying to hire right now,” he said. “We pray we can keep our business levels going and keep people as satisfied as possible so they come back, but it puts a really heavy burden on the business owners so we respect what they’re doing right now to try to make things work.”

Ms. Olmstead also said she sees the lack of affordable housing as a driving factor in the worker shortage. She said even though she’s been offering ample overtime and paying employees more, it’s often still not enough to live in the area.

Not only the restaurant industry has been feeling the labor crunch. Mr. Browder said hotels, motels and vacation rental companies, which make up the other key sector of the county’s hospitality industry, are also understaffed and busier than usual this year.

“I’ve talked to a few (managers) that they’re out cleaning rooms themselves because they just want to make sure the guests have a great experience,” he said. “They always work hard, but they’re having to get down and dirty a little bit more than usual this year.”

One business that’s bucking the trend is Emerald Isle Realty, a vacation rental company with more than 600 short-term vacation rental units and close to 150 long-term rental units. Owner Julia Wax said the company was at full capacity all summer 2020 and is fully booked through October this year, as well.

“Every week is the Fourth of July for Emerald Isle Realty,” she said.

In order to keep up with the massive demand, Ms. Wax said she has been “intentional about being the best employer we can be.”

“The real shortage is of employers who are willing or able to pay a living wage,” she said.

Ms. Wax said her starting pay is $15 per hour, what she considers a living wage in this county. She said the company strives to create a supportive, family-like work environment, which has led to a “terrific” retention rate in spite of the heavy demands and tough work asked of employees. Positions do open up occasionally, but Ms. Wax hasn’t had too much trouble filling them.

“Folks aren’t willing to work the minimum wage ($7.25 an hour in North Carolina) anymore, they know their worth and that they have more value than that,” she said.

The company has also taken a proactive stance in the fight against COVID-19, Ms. Wax said, with an employee vaccination rate around 80%. Each employee who receives the vaccine automatically receives a $250 bonus, and three vaccinated individuals received $1,000 each in a recent drawing. 

Mr. Kies and others acknowledged it’s not just the hospitality industry struggling to find workers, for a wide variety of reasons. Nationwide, The Associated Press reports U.S. employers posted 9.21 million jobs in May, the most since record-keeping began in 2000.

One popular explanation for the current labor shortage is that pandemic-related unemployment benefits were overly generous and encouraged people not to seek work as the economy has gradually reopened. But according to the AP, many factors are thought to have contributed to the shortage of people seeking work again: Difficulty arranging or affording child care, lingering fears of COVID-19, early retirements by older workers, a slowdown in immigration and a decision by some people to seek new careers rather than return to their old jobs.

Mr. Kies and others don’t see business slowing down any time soon this year, and they encourage visitors and locals to practice patience when going out to eat or drink this summer.

“We hope everybody stays patient and understanding that their favorite restaurant may not be open when they want it to be,” Mr. Kies said. “They’re going through a lot.”

 

Contact Elise Clouser at elise@thenewstimes.com; by phone at 252-726-7081 ext. 229; or follow on Twitter @eliseccnt.

 

(6) comments

beachmami13

Thanks to Ms. Wax for realizing the pay needed to live in the area. The "forces that be" wanted this area to have a mainly tourism driven economy, now they need to ante up and pay enough for the workers to live in this area. I am cynical, but I think they thought they could have their cake and eat it too, as in lots of tourists and higher real estate costs, etc, but still w/lots of locals who are willing to work for $7.25. Just another one of the hidden costs involved w/going for a tourist centric economy instead of diversifying the business options.

Sealevel Edward

Kudos to Emerald Isle Realty and their active plans to retain employees. I am particularly struck by their 80% vaccinated staff number, with a cash bonus for every one of them that gets the anti-COVID jab. While there are many in our county that refuse to be vaccinated, who refuse to wear masks, and who don't believe that it is a risk (I don't know a single person who died, therefore it's a hoax, they contend).

Increase the number of fully vaccinated residents and the watch employees come back.

David Collins

E I Reality is a money machine . If employee pay goes up , then so do their fees and the tourists pay the freight . Wish I had been handed a gold mine like that . Hospitality businesses , eateries and the like , have to fight for every dime they make . Always an abundance of competition .

Sorry but I think the lady is just a bit out of touch with reality . That happens with dynasties .

drewski

So very nice to read an article that does not play the covid benefits are why employers are struggling mantra. $ 15 is a livable wage locally, if you are quite frugal. Housing costs are terrible, and there is not much to choose from in the rental market. Reality is even in bad( i mean BAD) trailer park its 700 bucks a month, add basic utils, groceries, car pymt and insurance.. How much can those folks save per month to eventually get ahead? HMMMM.

David Collins

$15/hr is only $31,200 a year gross for full employment , 40 hr/52 weeks . After taxes and deductions the number shrinks considerably . Few hospitality workers work full time but they do get tips . Even so , there is precious little decent , by most standards , housing available locally . Possible solution is to allow section 8 , rent controlled housing to be constructed somewhere nearby to accommodate these workers . Yup , a worker village . Problem is few would want it located in or around their neighborhood for all of the well known reasons and some of them very real . High density , low cost does attract an undesirable element with associated problems . So , let’s go with $25/$30 hour wages . That is $62,400 gross . Still not enough for access to today’s hot housing market . What to do , what to do , for housing is just part of the picture . Other costs have risen drastically and continue to climb . Of course this unemployment payola scheme is a factor , it will run out as they always do and then what ? It is a real problem . Paying folks $15 , $30 or $100 per hour to do menial jobs is crazy and unsustainable . Just gonna have to clean up after ourselves and eat at home more . Not the thing vacationers with relatively deep pockets want to hear but unless the workers are bussed in and out daily from afar , that is what you can expect . The willing worker bee has been effectively eliminated by government mismanagement of the purse and not likely to change any time soon or at least the next few years or so . Let them eat cake !

David Collins

Had a conversation with a local higher end restaurant owner/operator . He showed me how much more quality meat , poultry and seafood is costing him today . Like almost three times as much or more in some cases . Can only bump up the prices to the customers so much before they reconsider coming in . Even in a vacation area like this .

Add in increasing labor costs , everyone makes more than minimum wage because they are worth it . If not , don’t need them . About a quality customer experience , period . Totally wants you to come back .

It is a tough time for this industry with no end of obstacles in sight .

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