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ORLA Update: June 23, 2022

6/23/2022

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Third Party Deliver Fee Cap / Hotel Loading Zones

Recently, the Oregon Restaurant & Lodging Association (ORLA) went to bat on a couple of issues affecting restaurants and lodging properties in Portland and we came away with two huge wins!
 
On the restaurant side, ORLA was instrumental in securing an extension of the 10% Delivery Fee Cap for an additional eight months. The ordinance takes effect June 29 when the ordinance from 2020 was set to expire. ORLA will now work with restaurant owners, the City of Portland, the third party delivery companies and other stakeholders on a proposal around a permanent delivery fee cap within the city limits. A huge thanks to the restaurant operators who testified and shared their stories to City Council.
 
On the lodging side, ORLA reached out and communicated with Commissioner Hardesty’s office about proposed changes to hotel loading zones that would have turned the current 15-minute zones into 3-minute zones. Our discussions were successful in maintaining the 15-minute loading zones.  ORLA pointed out that as Portland hotels continue to recover from the last two and a half years, making it more difficult and less welcoming for visitors to enjoy our city is the opposite of what we need to be doing.
 
Advocacy on behalf of the hospitality industry and our members is at the core of what we do at ORLA and we appreciate your involvement and your support as we continue to fight on your behalf.

Questions? Contact ORLA Regional Representative Steven Scardina or ORLA Director of Government Affairs Greg Astley.
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ORLA Update: June 17, 2022

6/17/2022

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Inflation / Job Loss / Travel Forecast 

More than two years into the pandemic and we're still realizing the effects of Covid on travel, supply of goods, and inflation. We appreciate the work our national partners do to provide valuable insights and data highlighting the ongoing economic issues facing our industry.

RESTAURANTS
This week, the National Restaurant Association released an updated summary of the Misery index based on the May jobs and sales reports. While job growth is still slow, sales are continuing to grow. American restaurant owners and operators are experiencing the impact of several global factors influencing food supply. The war in Ukraine, India’s record heat wave, and delayed planting in China last year mean that wheat is in short supply. With wholesale food prices already up nearly 18% in the last 12 months, the growing list of unavailable or items in short supply is adding pressure to an already strained industry.

Highlights from the June 2022 Misery Index:
  • Eating and drinking places added just over 46,000 jobs in May, the fifth consecutive month of growth below 100,000 jobs. No other industry has a longer road to reach a full employment recovery.   
    • Despite steady growth over the last year, the industry still hasn’t recovered 750,000 jobs – or 6.1% – of the jobs lost in the pandemic. 
  • 90,000 restaurants closed permanently or long-term because of the pandemic. 
    • The rebuilding of the restaurant and foodservice workforce is being hampered by the most severe labor shortage on record. 
  • Wholesale food prices increased more than 15.6% during the last 12 months (May 2021-May 2022). This was the 10th consecutive month of double-digit gains (on a 12-month basis). 
  • Menu prices rose 7.4% during the last 12 months (May 2021-May 2022), the largest 12-month increase since 1981. The recent rise in menu prices was due largely to higher input costs – particularly food and labor. 

LODGING
A recent survey commissioned by the American Hotel & Lodging Association (AHLA) shares how new concerns about gas prices and inflation are impacting Americans’ travel plans in a variety of ways. Majorities say they are likely to take fewer leisure trips (57%) and shorter trips (54%) due to current gas prices, while 44% are likely to postpone trips, and 33% are likely to cancel with no plans to reschedule. 82% say gas prices will have at least some impact on their travel destination(s).

The survey of 2,210 adults was conducted May 18-22, 2022. Other key findings include:
  • 57% are planning a family vacation this summer, a majority of which plan to stay in a hotel
  • 60% say they are likely to take more vacations this year compared to 2020-21
  • 60% are likely to attend more indoor gatherings
  • 90% say gas prices are a consideration in deciding whether to travel in the next three months
  • 82% say gas prices will have at least some impact on their travel destination(s) 
  • 90% say inflation is a consideration in deciding whether to travel in the next three months 
  • 78% of Americans say that COVID-19 infection rates are a consideration in deciding whether to travel this summer

AHLA recently relaunched its Hospitality is Working campaign with a focus on reigniting travel across the nation and highlighting hotels’ positive economic impact in cities across the country. With travel ramping back up, hotels have embarked on an unprecedented hiring spree to recruit hundreds of thousands of workers for more than 200 hotel career pathways. 

Bottom line, restaurant and lodging operators are feeling the same economic pressures that our customers and guests are, and we’re always going to work hard so we can keep serving them, our employees, and our communities. 

Stay strong, serve well!
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ORLA Update: June 15, 2022

6/15/2022

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ERC Eligibility / National CEO Presence / Board Nominations

Eligibility Clarification for 2021 Q3 Employee Retention Tax Credits
The law states there are two criteria by which an employer may qualify for the Employee Retention Credit:
  • A full or partial suspension of the operation of their trade or business during the quarter due to government orders limiting commerce, travel or group meetings due to Covid-19
  • A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter were less than 80% of the gross receipts in the same quarter in 2019
Much discussion has been had regarding the first test and if a partial suspension of business, even for just a few days in a given quarter, would still trigger the credit. The answer is yes as the law does not extrapolate that there is a certain number of days that need to be affected for that quarter to qualify for the credit in that quarter. There has been many interpretations of the law and we would highly recommend any company not qualifying under the revenue based test to document the ways government orders limited their ability to operate as they move through the process to secure their employee retention tax credits. A special thanks to Jay Torgerson, CEO of Cross Financial for his analysis. To learn more about applying for your employee retention tax credits and for assistance with paperwork, visit ORLA’s ERC Support Center.

AHLA and NRA CEOs to Speak at ORLA's Hospitality Conference
Mark your calendars and plan on attending the ORLA Hospitality Conference September 11-12 in Eugene. We are excited to host both CEOs from our national affiliates for the first time at an ORLA event. Michelle Korsmo, President & CEO for the National Restaurant Association and Chip Rogers, President & CEO for the American Hotel & Lodging Association will be speaking in person during the kickoff lunch on Sunday. This is a rare opportunity to hear insights directly from these industry leaders on legislative activity in Congress, industry trends, emerging issues, and projected industry recovery. In addition to the general sessions, we have eight breakout sessions including two that will offer a deeper dive on restaurant and lodging advocacy. 

ORLA Board Nominations Committee Convenes in July
Active ORLA members provide the backbone for all association efforts and we remain fortunate in having committed restaurant, lodging, and allied members who serve on ORLA’s Board of Directors. The ORLA Board is made up of 10 restaurant member representatives, 10 lodging member representatives, and 3 Allied member representatives. Board members serve 3 year terms and attend 4 board meetings each year. Those serving are eligible to serve two consecutive terms before reaching their term limit. For ORLA’s upcoming fiscal year beginning October 1 there are 3 openings on the board due to term limits – 1 restaurant, 1 lodging, and 1 allied position. If you are interested in being considered for ORLA Board service please reach out to ORLA President & CEO Jason Brandt.

Sysco Sponsors Teacher Flex Fund
Thanks to our partners at Sysco, the Oregon Hospitality Foundation had the opportunity to extend a small grant application in support of the ProStart program across the state. The Oregon ProStart Teacher Flex Fund encouraged teachers to apply for a $500 grant for to prepare for the 2022–2023 school year. At the teacher's discretion, these funds can be spent on much-needed products or equipment within the classroom to help facilitate their culinary program. Allocations from the $5,000 Flex Fund were made on a first come, first serve basis, and will be dispersed later this month. To learn more about how ProStart is helping foster our next generation of industry leaders, or to see how you can support this valuable career technical education program, visit OregonRLA.org/prostart.

Questions? Feel free to contact your association.
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5 Ways to Deliver Great Guest Experiences with Reduced Staff

6/15/2022

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Guest Blog | Porter

Staff shortages are leaving many of us with no choice but to shortchange the guest experience. Here are 5 ways that you can create positive guest experiences with a reduced staff. 
  1. Train + Retain
    It may seem counterintuitive to invest more time in your onboarding program, but helping your team quickly become confident experts in their roles will reduce friction down the road. This will lead to fewer mistakes, questions, and underperformance. The quicker that new hires are able to positively contribute to the guest experience, the more quickly they will grow in confidence — an attribute that leads to better performance and greater retention. The Disney Institute has found that when a staff member has confidence in their leaders, they are more likely to make a positive contribution through their work. So by investing in training, you are investing in better customer experiences and greater retention — both big wins when having to deal with reduced staff.

  2. Stay Positive
    It is very natural for the stress of running a business + the pressures of reduced staff to add strain, complications, and weight to our disposition. That weight we carry trickles down into the interactions we have with staff, which adds weight to their already heavy load as well. As that weight mounts on everyone, performance will drop and retention rates will suffer. By maintaining a positive and supportive culture, staff will become more productive during their working hours, more engaging with customers, leading to better experiences, and better staff retention. Headspace found that 79% of workers feel underappreciated, and while there are a variety of reasons for that statistic, the one clear takeaway is that cultivating a positive and supportive working culture will lead to better results for customers, staff, and your bottom line. 

  3. Reduce + Focus
    Every situation is unique, but most operations can become more focused and still offer a great experience. If you are forced to make tough decisions in light of staffing difficulties, use this opportunity to evaluate what you do best and focus on delivering that very best offering for this experience-driven economy. Maybe that means closing down one day a week so you can deliver a great experience the other six. Maybe it means cutting delivery options and focusing on the on-site experience. Only you know your context, but focusing on making it the very best can allow you to keep the value of your business intact while making the best of the situation with reduced staff. 

  4. Move to Digital F&B Ordering
    Whether you are a restaurant, brewery, or any other venue offering food and beverage, move to digital ordering. Some platforms are clunky and will actually slow down your staff, so choose a platform carefully. Porter is one platform that has been able to reduce staff time by 50 seconds per order. That adds up to 58 hours of reduced labor per month at a small food hall! They also have found orders to increase by 20% in ticket size and tips are up 15%, so you save labor and generate revenue. Win-win!

  5. Go Deep with FAQs 
    If you are answering the same questions on a regular basis, invest some time in a deep and engaging FAQ section to your website. This will save your staff time and offer customers a better experience. Even if you don’t have good news, providing quick answers to common customer questions are appreciated and will improve a customer’s perception of your brand. As you build out your FAQ, be sure to cover all of the common questions, but you can also branch out to add personality to the experience by answering less obvious questions, and you can make it more engaging with playful copy, video explanations, and demonstrations. And to help customers find this section of your site, here are Google’s tips for increasing your FAQ’s searchability. By investing in an engaging FAQ, you will improve the guest experience, increase traffic to your website, and reduce staff time in the process. | Bryan Taylor, Co-founder at Porter

This guest blog was submitted by Porter. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.
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Climbing Vertically to Success

6/6/2022

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laptop
Guest Blog | Togather Restaurant Consulting

The landscape of our industry is in constant flux. It seems that each day we wake up to a new obstacle on our horizon, whether it be rising prices from vendors, competing with the mounting employee wages in your community, or simply tackling the ongoing supply chain issues. Looking at these things from a broad scope can be overwhelming for many business owners. A question that begs to be answered is this: how do we achieve our financial goals when the economy seems to be pitted against us? 

We have seen plenty of restaurant owners scale back their operations lately. Menus are shrinking, hours of operation are dwindling, and table service is becoming a rarity. Many would consider this unavoidable in the current market climate. While these actions have been proven to help mitigate losses, it would be a disservice to ignore additional options for making a profit. Vertical integration is a fantastic opportunity to gain revenue elsewhere within your restaurant. Vertical integration, simply put, is when a company controls more than one stage of the supply chain or production cycle. This creates an avenue of potential income based upon commodities already found within your company. Some examples of vertical integration would include bottling and selling signature sauces that your restaurant produces, creating take and bake menu items for pickup, or perhaps even hosting cocktail classes taught by your bartenders. The possibilities differ for each restaurant or concept, and finding a lucrative vertical for your specific company might look different from your competitors. The key to creating the right vertical for you lies within your unique company. Take a look at the things that keep your regulars coming back and ask yourself how you can make them even more profitable. 

There are numerous benefits to utilizing vertical integration in your business. However, the strongest advantages include sustainability, quality, and increased market share. To help explain these notes, we will be using a hypothetical vertical. In the following scenarios, we will be discussing a fabricated Mediterranean restaurant called “Yamas”. They are pursuing a vertical that markets their tzatziki in bottles to local stores and vendors. Now, we can dive into the benefits of vertical integration. 
​
  • Sustainability: When businesses integrate verticals, their metrics for sustainability increase. How is this possible? Put simply, vertically integrated companies communicate more fully and crossover their staff, product, and ingredients. Efforts towards sustainability are more successful overall. This is due to the fact that their efforts are deeply rooted amongst multiple levels and move quicker than a standalone concept, as the order of operations becomes more concise. Consolidating staff and allocating resources appropriately ultimately save your bottom line, all while eliminating the middleman markup regularly found in production. For example, Yamas decided to bottle and sell their tzatziki. By creating a production line that is overseen by the holder of the recipe, and is being created by staff that has knowledge of said recipe, each facet of production is held to the highest standard and is executed by employees that have experience creating it. 

  • Quality: Vertical integrations have a proprietary claim on their concepts, which ensures consistency amongst sister companies and concepts. “Trade secrets” are taught in house, and the ability to learn from within improves the overall caliber of each product. Streamlining your process can only benefit the quality of your creations. Through repetition, insider knowledge, and consistency, we see an elevated standard of production across the board. Our tzatziki line, Yamas, sees an uptick in customer satisfaction when each bottle produced is invariant and refined. 

  • Increased market share: Increasing your market share means increasing the effort you put into sales as a business, and using new or additional strategies to help you get there. The higher the market share, the more stable your business can potentially be. Additionally, this helps deter competitors. It’s difficult to compete with a company that gains access to limited production. By creating a vertical internally, you are efficiently monopolizing your own market. This creates effective barriers for competitors to enter your market. Yamas has perfected their production line and has found an excellent strategy for receiving and maintaining their supply. This helps Yamas to expand their brand recognition and upset the market with leading sales in their community for tzatziki. 

In the end, there are many factors to consider when looking towards vertical integration. Before deciding to take on a project of this scale, ask what is to be gained from pursuing a vertical. Would creating a vertical be realistic for your company? What problem would it be solving? What opportunities would arise from your vertical integration? Can your business support an internal start-up? These questions can only be answered with data analytics, creativity, and ingenuity. Integrating verticals into your business has the potential to elevate your profit margins when executed correctly. While expanding horizontally seems to be an impracticability in a post-pandemic climate, we can always look vertically. | Kate Ratledge, Bar & Front of House Consultant. Togather Restaurant Consulting. 


This guest blog was submitted by Togather Restaurant Consulting. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.
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ORLA Update: June 3, 2022

6/3/2022

 
Alcohol Tax / Commission Caps on 3rd Party Deliveries / PFMLA / Tip Pooling Resources

Fighting Oregon Alcohol Tax Increases
Here's a quick update on our ongoing fight to protect the industry from increased beverage taxes in Oregon. Our next fight against increased alcohol taxes will surely come up yet again in the 2023 Legislative Session. Our friends at Quinn Thomas have been working hard to keep our organizational alliance intact as well as help identify messaging relating to some of the ongoing problems with Oregon’s broken addiction treatment and recovery system. This analysis on Alcohol Price Elasticity helps shed more light on the lack of correlation between increased alcohol taxes and decreases in alcohol use.

Upcoming Vote on Capping Third Party Delivery Fees at 15%
Portland City Council will vote on June 15 to cap delivery fees for restaurants from third party platforms at fifteen percent.  If approved, the ordinance would take effect June 29, 2022 when the emergency order capping delivery fees at ten percent expires. 

In addition to the fifteen percent delivery fee cap, the ordinance would allow third party delivery platforms the ability to charge:
  • No more than five percent for a Restaurant Take-Out Fee
  • A three percent Transaction Fee in the amount charged by the payment processor but not to exceed three percent of the Purchase Price per Order unless the payment processor charges more than three percent.
 
The ordinance also prohibits:
  • Third party platforms from performing any services on behalf of or disclosing information about a restaurant without their consent, including, but not limited to: Menu, pricing and contact information
  • Charging a restaurant a fee which they have not agreed to pay
  • Charging a restaurant for a “telephone order” which does not result in an actual order being placed
 
Paid Family Leave Concerns
You may recall a tough fight in the 2019 Oregon Legislative Session on Paid Family Leave. The new labor law passed before Covid and has been in hibernation mode behind the scenes as the Oregon Employment Department worked to get their ducks in a row for a 2023 launch. Of course we had this little thing called Covid which upended our world and unfortunately those unexpected challenges have not changed the state’s plan to fully implement their “Paid Leave Oregon” program in 2023.
 
The Paid Leave Oregon programs latest round of rules addresses a variety of issues including appeals, wages, benefits, and equivalent plans. ORLA’s statewide business partner OBI has participated in the rulemaking advisory committee and submitted comments on behalf of the business community. We continue to worry about the confusion this will create for employers and employees that are also subject to the Oregon Family Leave Act and the federal Family and Medical Leave Act. OBI hopes to introduce legislation in the 2023 session to address this issue.

Key date: The 1% payroll tax will begin on January 1, 2023. Employees pay 60% of the tax and employers pay the remaining 40%. However, employers with less than 25 employees are not required to contribute to the program, but their employees are. Alternatively, employers can opt to provide a private equivalent plan through insurance or by self-insuring, rather than participate in the state program (ORLA is actively looking into private sector solutions right now – any progress will move through our ORLAMS board process). Employees will be eligible to file claims under both the state and private plans in September 2023.

Webinar on Tip Pooling & Overtime Compliance
ORLA hosted a webinar June 2 on “How to Ensure You’re in Compliance with Overtime and Tip Pooling.” Representatives from the Department of Labor, Wage & Hour Division Portland District covered these topics and more, including fielding several situational questions from industry members. The following resources were shared:
  • Fair Labor Standards Act
  • FLSA Poster
  • Fact Sheet #2A: Child Labor Rules for Employing Youth in Restaurants and Quick-Service Establishments Under the Fair Labor Standards Act (FLSA)
  • Fact Sheet #23: Overtime Pay Requirements of the FLSA
  • Fact Sheet #44: Visits to Employers
  • Fact Sheet #56C: Bonuses under the Fair Labor Standards Act (FLSA)

For questions, call the WHD toll free and confidential information helpline at 1-866-4US-WAGE (1-866-487-9243), or the Portland District office directly at 503-326-3057. You can also call or visit the nearest Wage and Hour Division Office.

For a copy of the webinar presentation slides, please email Lori Little.

Have any questions? Feel free to reach out to ORLA Government Affairs via email.

Summer Travel Outlook Optimistic as We Look Toward Oregon22

5/31/2022

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travel statistic
Lodging operators are optimistic about leisure travel returning to Oregon.  In addition to Oregonians traveling locally around the state, the World Athletic Championships - Oregon22 should bring visitors from around the globe to experience Oregon’s unique hospitality.
 
According to a recent survey conducted by Morning Consult and commissioned by the American Hotel & Lodging Association, nearly seven in ten Americans (69%) report being likely to travel this summer, with 60% saying they are likely to take more vacations this year compared to 2020-21.
 
The survey of 2,210 adults was conducted May 18-22, 2022. Other key findings include:
  • 68% of Americans agree they have a greater appreciation for travel because of missed experiences during the COVID-19 pandemic
  • 57% are planning a family vacation this summer, a majority of which plan to stay in a hotel
  • 60% say they are likely to take more vacations this year compared to 2020-21
    • 57% are likely to take longer vacations
    • 56% are likely to take trips to farther-away destinations
 
As business and leisure travel continue to rebound from the last two and a half years of restrictions and shutdowns, lodging operators in Oregon are looking to in-state travel as well as the boost from over 200 countries and their fans coming to our state for the 2022 World Athletic Championships. Although the competition is in Eugene, there’s no doubt visitors to Oregon will take the opportunity to explore every corner of our state and take advantage of the natural beauty and hospitality our industry and others will offer.

You can find much more information on the World Athletic Championships on Travel Oregon's website. An industry-facing toolkit has also been developed to provide additional information, resources, broadcast-quality b-roll and hi-res images, as well as inspirational trip ideas and media contact information. Questions can be directed to Jaime Eder, Industry Communications Manager at Travel Oregon.  | Greg Astley, Director of Government Affairs, ORLA

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ORLA Update: May 20, 2022

5/20/2022

 
RRF / Elections / Liquor Privatization...

Restaurant Revitalization Fund (RRF) Senate Vote – Oregon Senators Voted Yes
Yesterday, the U.S. Senate was unable to overcome a filibuster on a motion to begin debate on a $48 billion bill that would have replenished the Restaurant Revitalization Fund (RRF).  The vote to invoke cloture and overcome the filibuster failed by a vote of 52-43 (60 votes were needed to prevail). Read the press release from the National Restaurant Association for more information. Highlights of the vote from yesterday:
  • Every Democrat (and Independent) present voted in favor of invoking cloture. Notable that Joe Manchin was secured. Three Democrats were not present: Rosen (NV), Brown (OH), and Van Hollen (MD).
  • Five Republicans voted to invoke cloture: Blunt (MO), Cassidy (LA), Collins (ME), Murkowski (AK), Wicker (MS). Two Republicans were not present: Sen. Ernst (IA) and Marshall (KS).

Primary Election Roundup
There has been an increase in the number of industry members who have expressed a willingness to run for office. ORLA members Cheri Helt (BOLI Commissioner candidate), Daniel Nguyen (State Rep Candidate), Janelle Bynum (Current State Rep), and former ORLA staff member Christine Drazan are all working to bring more industry expertise to our policy making decisions. Here are a few highlights from this week’s primary election on state races:
  • This November we'll see three high profile women on the ballot for Governor: Christine Drazan, Tina Kotek, and Betsy Johnson. ORLA has relationships with all three candidates and regardless of the outcome we are confident in our ability to maintain an active working relationship with the new Governor and their staff.
  • The BOLI Commissioner race looks setup for a runoff between Cheri Helt and Christina Stephenson. If Christina (who currently sits at 47.4%) is able to get just over 50% of the vote once Clackamas County counts their ballots then only her name would appear on the general election ballot.
  • More updates to come as we enter general election season. If you want to stay in the know, please plan on joining the monthly ORLA Government Affairs Committee meetings typically held on the last Friday of the month.

Portland Lodging Alliance (PLA) Statement on Portland City Budget
ORLA was involved in group discussions on the City of Portland's budget earlier this week. Generally, the high level social service and public safety investments and content within the budget seem on point. What continues to plague Portland are the deficiencies in management and a desire by our members to see consistent progress on the streets. One of ORLA’s local groups is called the Portland Lodging Alliance and current ORLA Board Members George Schweitzer and Daryn White Cyrus sit on the PLA Steering Committee. Joining them in leadership are Brandon Carter of the Bidwell downtown and Martin McAllister who runs the waterfront Marriott Hotel. This coming week the Portland Lodging Alliance is submitting comments on Mayor Wheeler’s proposed budget to the City through their online public comment portal.

Liquor Privatization Off the November Ballot
There’s one less thing to worry about on the November ballot now that the Northwest Grocers Association have pulled their initiative petition from the signature gathering process to qualify as a state measure. Initiative Petition 35 would have opened the door to liquor sales in grocery stores here in Oregon. Although the convenience may seem enticing on its surface there are far ranging implications if the current alcohol system were to be disrupted with cost escalations on liquor inevitable for ORLA members. See the story summing it all up here on OPB. ORLA has been an active part of the opposition campaign to this effort ever since our Government Affairs Committee voted unanimously to oppose these efforts when this was attempted the last time.

Have any questions? Feel free to reach out to us via email.

Designing Digital F&B Experiences to Feel More Human

5/18/2022

 
​Guest Blog | Porter

We’ve all had those moments where digital tools were brought in for “convenience” — contactless check-in kiosks, smart TVs, digital menus — but end up being more frustrating than convenient. Instead of making life easier for your reduced staff, now they have to troubleshoot IT problems. And guests who were previously known by name are suddenly made to feel anonymous. 

Technology that isn’t elevating human experiences is compounding the problems we face in hospitality. That is because most digital tools have been designed to solve a financial problem, rather than trying to both solve a financial problem AND elevate the guest experience in the process. This has been especially true of the many attempts to streamline and digitize food and beverage experiences. 

When we set out to design Porter, a digital F&B platform to elevate the guest experience at food halls, restaurants, and multi-vendor establishments, we followed a design thinking process that you can practice whenever you consider adding a new digital tool or are thinking of rolling out a new service. Here are the stages of the design thinking process: 

Empathy
First, you need to sit in the seat of the person who will be using this tool / service / experience. You don’t start with defining what you are building. You don’t start with financial implications. You start by observing the guest experience and determining how you can improve it.

Rapid Prototyping
New tools need to work, but they also need to elevate how we feel about an experience. By building prototypes and watching guests interact with them — physically and digitally watching them — we are able to not only see how those prototypes work, but also how they make guests feel. We pay attention to what they say to their friends across the table. We can refine later and make our new tool more elegant, but for now we just want to see if it will truly solve a problem before we invest time and resources in a solution. 

Design
When we design to elevate a guest experience, we take that empathetic foundation and the lessons learned while prototyping, and we then design a moment that frictionlessly folds into the human experiences we are trying to improve. If we can make a guest’s experience feel smoother, more personal, and more memorable than it previously felt, then we have a successful design. If not, we need to go back to prototyping. 

Evolve
Once we build a useful tool or service, we can enjoy and celebrate for five minutes, but then we get back to work. We go back to watching, identifying where hangups happen, and discover where the frustrations occur. And then we evolve, because the world keeps moving forward and our tools and services need to adapt to those changes lest they end up becoming another clunky experience. 

Pulling it All Together
If you’re not familiar with design thinking, it is the process that is essentially outlined above, and it was the framework that we utilized to build Porter. As owners of three food halls, we wanted to solve one main problem: long lines. We watched as people would spend the first 10 minutes standing in multiple lines rather than with the people they came to be with. And before ordering a second round, they would again look to see how long the lines were before deciding whether it was worth leaving their friends and standing in line again.

These observations formed the empathy that we used to build some digital prototypes to test at one location. First we built a digital re-ordering tool for patrons who had already opened a tab. This first prototype was designed to simply see if patrons would use technology to solve the long line problem. And they did! The average number of rounds jumped to 3.4 rounds per tab. 

We had empathetically observed, built a prototype, designed the tool, and then went back to evolve as we learned more. Next we added the ability to preauthorize a card so guests could order from multiple vendors on one tab. Then we added the ability to create an account and store payment information. Today, average tickets are up 20%, tips are up 15%, 50% of our patrons use Porter to order, and our staff save 50 seconds per order placed digitally through Porter as compared to orders placed at the counter. 

We continued to observe, prototype, design, and evolve the tool at our three halls until we decided it was a tool that was worth sharing with others who were looking to elevate the F&B experience at their food halls, breweries, and venues. Anywhere that offers F&B, values efficiency, but is also looking to elevate the guest experience can now use Porter — which all started with a simple observation and a desire to solve a problem for our guests. 

So what problem are you looking to solve? | Bryan Taylor, Co-founder at Porter

This guest blog was submitted by Porter. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.

Accountants Love Months–and Why the Hospitality Industry Shouldn’t

5/16/2022

 
Guest Blog | My Accounting Team

There are pros and cons for closing books monthly versus using four weekends per period


The Gregorian calendar has been around since 1582. Even then, there was controversy. Some parts of the world waited four centuries to adopt the new calendar. 

It now seems quite natural that we’d split our fiscal years into these same 12 months of the year. But this presents unique challenges for the hospitality industry. Over 99% of accounting is done by closing the books at the end of each month, then comparing this month against last month. Most who use monthly methods know to be cautious about seasonality. It’s obvious you can’t compare July to January. The results can be misleading. But the problems for restaurants go deeper than seasonality. 

To illustrate the challenges, consider this puzzle. In 2022, July has four weekends. August has five. In two years (2024), this will flip! July will have five weekends. August will have four. Many, if not most, restaurants do wildly different business on weekends and weekdays. Some are much busier, while others (for example, a central business district lunch spot) may be almost empty on the weekends. Comparing July and August is like comparing apples and oranges. The variation means that even this June versus last June can be similarly misleading. 

We can all imagine how difficult it was to shift the world calendars ten days back in 1582. This was before the advent of telegraphs, telephones, Internet and computers. Thankfully, modern accounting methods mean there are a couple of ways around this conundrum of extra weekends that comes up with monthly-based accounting. As with most solutions, there is a fast fix and a harder fix. The more difficult way is more accurate. The easier way is less precise. 

Some accounting firms have done both. From experience, we in the accounting world know that both have merits. It just depends on your needs and circumstances.

Let’s start with the most accurate way. Rather than dividing the year into months, we can divide it into thirteen periods. Each period has 28 days. Typically, the periods would be Monday to Sunday. Now see what we did? Each period is directly comparable. Each period has four weekends. Each period has the same number of days. Sure, there are still other seasonal factors. And we also need to manage a 364-day year (the IRS is not going to move away from annual returns any time soon). But these are relatively easy problems to deal with. (Also, the 28-day period also greatly simplifies cash planning, but we’ll save that discussion for another time.)

The above method of thirteen periods with 28 days each is accurate, yes. But it involves some heavy lifting. For example, rent is typically paid monthly, but with the 28-day methodology, every so often, the period won’t include a month end. Just like you may receive a batch of ingredients that are a bit different from the norm, or factors such as humidity or oven temperature can affect products–accountants have to adjust for variations, too. This month’s-end issue requires that we adapt, otherwise our comparability will collapse like a mishandled souffle. So, we record rent daily to accommodate this. 

There are a dozen other similar challenges. For many small businesses, this is overkill. If you need the simpler method, we’ve also done an adjusted month where we reduce or increase revenue and expense amounts to equalize the effect of the number of days and weekends. This has worked well when planning a new restaurant, because targets can be set and analyzed. (Note, these adjustments are purely for comparison purposes.) So, from a formal accounting perspective, we have a regular January and a regular February, and so on. 

If you’ve ever wondered why the irregular calendar months have created problems for accounting and forecasting, you’re not wrong. Think about how hard it was to reconcile all the calendar problems in the 16th century, when scientists and leaders took 37 years to strategize a plan to create the Gregorian calendar–and then it still took years for adoption.

Modern accounting doesn’t have these same problems now. We have tools and tips to address variability. We have the cloud. We have software. When restaurants and the food service industry face the extra weekend problem, we have reliable solutions. If you’re a small restaurant and want to keep things simple, we generally recommend the quicker fix. If you do complex costing and calculations, often the more elaborate solution can provide you with precision and clarity on cash flow and other important data. 

Don’t get lost in the seasonality and calendar conundrum. Talk with an accountant today about how to manage the extra weekends and get a handle of variability.

About:
Bruce Lange is the Chief Financial Officer of My Accounting Team (MAT). He has three decades of experience in Finance and Administration, having worked with organizations from small start-ups to multinational corporations like Oracle. MAT offers simple, secure, scalable cloud-based bookkeeping and accounting services. Contact Bruce and the team at MAT at sales@myaccountingteam.com or 541.844.1484.

This guest blog was submitted by My Accounting Team. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.

ORLA Update: Maay 6, 2022

5/6/2022

 
Paid Family Leave / Governor's Race / 'Hospitality is Working'

Paid Family Leave Rulemaking
Paid Family Leave passed in the long legislative session of 2019 before Covid and has been in a delayed planning state ever since. The law is now getting more attention as the Oregon Employment Department and their new Paid Family Medical Leave Insurance Division (PFMLI) work to launch the new program in 2023. The program is ambitious and requires a 60/40 percent employee/employer split in contributions to a new fund for specific family and medical leave needs. ORLA’s Director of Government Affairs serves on the rulemaking committee; we'll keep members informed of paid family leave updates. 
 
Governor’s Race & GOP Polling
Recent polling for the Governor’s Race shows former Oregon Restaurant Association staffer Christine Drazan may have a good shot at securing the GOP nomination for Governor in the upcoming primary. Most political pundits continue to believe the Democrat primary win will go to Tina Kotek although Tobias Read has been making a considerable push to gain more favor within the party. 
 
Hospitality is Working Campaign
The American Hotel & Lodging Association (AHLA) relaunched its Hospitality is Working campaign seeking to reignite travel nationwide and showcase the economic and community benefits hotels provide in neighborhoods across the country. Hospitality is Working showcases the broad range of benefits hotels provide the communities they serve while highlighting the industry’s strong commitment to investing in its workforce, providing quality career opportunities, and protecting employees and guests as more and more Americans begin to travel. The campaign will include television and digital advertising as well as AHLA events around the country alongside local hoteliers, economic development organizations and community groups. 

Have questions? Give us a call at 503.682.4422 or email us if you have any questions. Happy Friday!

ORLA Update: April 25, 2022

4/25/2022

 
PAC Auction / OLCC Presentation / Lodging Tax Accountability

One Big Night in Less than 2 Months

ORLA's largest fundraiser of the year will be here in less than 2 months. One Big Night will be held at the Portland Doubletree Hotel, Tuesday, June 7. ​
The event kicks off with a Silent Auction to raise money for ORLAPAC followed by a Dinner and Auction with ORLA’s Director of Government Affairs Greg Astley serving as our emcee. There will be 25 new names and faces in the 60-person Oregon House as a result of upcoming November elections – a staggering and record level of turnover which requires ORLA to be active and relationship-oriented in preparation for the 2023 six-month Legislative Session starting in February 2023. This is a huge year – let’s leave all our cards on the table and make a statement this election cycle.

​Presentation to OLCC Commission

ORLA representatives had an opportunity to present an industry update to the seven-member OLCC (Oregon Liquor and Cannabis) Commission last week. The presentation focused on the importance of OLCC staff extending liquor service footprints outdoors through a user friendly online process during Covid, their approach to license fee flexibility, and the emergence of to-go cocktails as another sales opportunity permanently available to the industry in Oregon to increase sales. We also flagged both ongoing inflation concerns and the importance of Economic Injury Disaster Loan extensions in helping our industry just barely keep our heads above water. ORLA remains focused on explaining the nature of invisible piles of debt on the shoulders of our operators while we all start seeing restaurants busy and even bustling. Today's sales numbers hopefully serve as a constant reminder that ongoing relief is necessary and warranted.

Industry Coverage in The Hill
The Hill published an op-ed from Sean Kennedy, Executive Vice President of Government Affairs for the National Restaurant Association. Sean hit the mark in covering what the industry needs to get back on track. It was a timely article right before industry operators head to DC this week.

Accountability for Local Governments on Local Lodging Taxes
ORLA remains committed to doing what we need to do in getting local governments to commit to transparency in how they spend industry tax dollars. We are currently in the middle of a disagreement with staff from one city in the Willamette Valley on how much of their lodging tax money is restricted for tourism promotion and facilities. A multitude of other local governments are also on our list in our pursuit of additional transparency.

Have questions? Give us a call at 503.682.4422 or email us if you have any questions. | ORLA

ORLA Update: April 8, 2022

4/8/2022

 
Local Lodging Tax Watchdog Work / The Fate of RRF / Workforce Storytelling / 77% of the Way

​
Yesterday, the House of Representatives approved a bill to replenish the Restaurant Revitalization Fund (RRF). Details on what to expect in DC as well as other updates from the week are below. Don’t forget to sign up and support our largest ORLAPAC fundraiser of the year, One Big Night. If you haven’t already, register to attend and/or consider donating an auction package and help us make a difference in the upcoming election cycle in support of our industry recovery efforts.

Local Lodging Tax Watchdog Work
ORLA’s successful win in court at both the Circuit Court and Oregon Court of Appeals level has helped usher in a new chapter of relevance for the association in ramping up our watchdog role for our lodging members and the broader tourism industry. As a reminder, ORLA won on all counts against the City of Bend which helped cement our legal standing in holding local governments accountable for how they expend local lodging tax dollars even though ORLA itself does not collect local lodging taxes directly. With the help of legal counsel, ORLA is actively seeking more transparency in the Cities of Gladstone, Gresham, Cannon Beach, and Albany. Watch ORLA's explanatory video as a refresher on how local lodging taxes are to be spent. This video has proven to be a helpful resource to help educate newly appointed local elected leaders or city administrative staff so please share with your contacts whenever helpful.

The Fate of RRF Replenishment
As anticipated, the U.S  House of Representatives passed H.R. 3807 - replenishment of the Restaurant Revitalization Fund. The challenge of getting replenishment over the finish line continues to be in the Senate. On Tuesday, Senator Ben Cardin (D-MD) introduced The Small Business COVID Relief Act of 2022 (SBCRA) (S. 4008). The SBCRA would allocate $40 billion for RRF replenishment and $8 billion for other small businesses impacted by COVID. It would partially offset (pay for) the $48 billion through $5 billion in unspent Payroll Protection Program funds. In the interim, we will encourage Senate Republicans and Democrats to reach an agreement on replenishing the RRF. The largest hurdle remains overcoming vast differences between the parties on whether the spending must be paid for, and how. If you haven't already, tell Senators to replenish the RRF. A special thanks to a contingent of ORLA current and past board members for joining ORLA President & CEO Jason Brandt and ORLA Director of Government Affairs Greg Astley at the National Restaurant Association Public Affairs Conference coming up at the end of this month in Washington D.C. RRF, as well as several other key issues will be a part of our discussions as we meet with lawmakers.
 
Workforce Storytelling
We have a big challenge at our doorstep which revolves around reclaiming the narrative around jobs and careers in the hospitality industry. There are incredible stories all around us about the positive and lasting impact hospitality jobs have for Oregonians from all backgrounds. The Spring edition of the Oregon Restaurant & Lodging Association magazine focuses in on the importance of mentors and the opportunities we all have to do more in sharing the opportunities in our industry with both high school and community college students. On page 24 is our Industry Champions article, The Essential Role Of Industry Mentors For High School Culinary Classrooms, where four of our ProStart mentors were interviewed. They each had great stories to tell, worthy of a broader share than just in print, so we repurposed the article as a blog post as well.
 
77% of the Way Back
The hardest hit sector, accommodation and food services, has regained 77% of the many jobs lost in the initial COVID crisis. In addition, the following article is featured on the Oregon Employment Department’s website regarding youth employment trends in our industry. It’s worth a read to learn about our history and our efforts to regain traction in employing high school youth over the course of the past decade.
 
Oregon OSHA Fixes Workforce Housing Caps
ORLA has been advocating for our hospitality businesses who provide housing for workers as a benefit of employment. This predominately impacts our resort members who leverage visas and provide work experience to citizens from other countries with those opportunities ramping up in the Spring and Summer seasons. Thankfully Oregon OSHA has answered the call to repeal the Covid rule that capped the amount of workers we were allowed to house in each dwelling unit due to concern over Covid spread. This will greatly assist members in controlling costs associated with the number of vacation homes/dwelling units that must be rented out for the purposes of workforce housing. 

Give us a call at 503.682.4422 or email us if you have any questions. | ORLA

The Essential Role Of Industry Mentors For High School Culinary Classrooms

4/6/2022

 
Prostart students
The Oregon Hospitality Foundation (OHF), in conjunction with the Oregon Restaurant & Lodging Association, supports a career technical education program called ProStart. This national curriculum is available to all schools in Oregon interested in growing their culinary and restaurant management programming for high school students. The Foundation is fortunate to work with many hospitality industry mentors integrated with this program. We interviewed four of these mentors who shared their stories about how they got involved with ProStart here in Oregon and continue to inspire our students to jump into the hospitality industry.

Josh Archibald, Executive Chef, Tillamook Creamery
Mentor, Seaside High School
 

OHF: What motivated you to get involved as a ProStart mentor?
Archibald: I was drawn to the program for a few different reasons. I actually graduated from Seaside High School in 1999. I took a simple Home Economics class, but no further food education or hospitality courses were offered at the time. I went on to continue cooking and eventually attend culinary school, but if I had the opportunity to be exposed to a program like ProStart, it would have provided better guidance in my own career path. From an operations standpoint, we were wise enough to recognize the need for skilled restaurant labor in our local community far ahead of the curve. We knew that investing in the program and its students would be not only beneficial to our own operations, but perhaps even the restaurant community in our tourism-based, beach economy. While that was absolutely part of the decision to support the program, it also goes along with the fundamentals of cooking for a living, and we’re able to provide opportunities to teach the next generation of culinarians. One of the most valuable things about the program is that even if a student decided to pursue another career path, the lessons it teaches are good life skills that are important for a life of feeding themselves, and the people they love.
 
OHF: What value can someone from the restaurant industry bring to the classroom? 
Archibald: I think by having access to industry experts, students can see the vast opportunities available to them in our field. At their impressionable age many think of the hospitality industry as just a hotel or pizza shop. While there is nothing wrong with that, they haven’t been exposed to much beyond their local community. Access to industry experts helps them understand our industry better, and the broad career paths offered within the field of hospitality–whether that means food stylist photographer or cruise ship concierge and all of the in-betweens. As an industry, our possibilities are endless, and giving students a glimpse into that can have huge benefits.
 
OHF: What experience do you have of hiring ProStart students? 
Archibald:
We were fortunate, especially in the years of our back-to-back state championships, to have great success in not only hiring, but retaining some of our students. It was a great way for us to source colleagues that we already had a relationship with, and in turn, who already knew us and our expectations. The timing of the tourism “season” works really well for their seasonal employment, and if they returned to the program in following years those students were already showing vast improvement in knowledge and leadership skills and became even larger assets to the program. As an industry this program can be one of our greatest solutions to continued workforce struggles as it allows us to teach, inspire, and cultivate the people that will run this industry in the future. 

Chef Michael Thieme
Mentor, North Eugene High School

OHF: What were you able to bring to the classroom as an industry member?
Thieme:
I bring my knowledge and experience. I’ve been a mentor working with Miho (ProStart instructor) for 19 years. And even when we weren’t in the competition, we still worked with the students on development of their skills. It’s kind of like, when we're in the classroom and we're preparing for a competition, it's more than just a competition. It’s also about how you market yourself and get your resume built. I try to get the students to do their part. It's their competition and so they need to create it and they need to build it– I just guide them and tell them where I think things are good and what we need to work on. I also try to give them a reality of what the industry is like. They learn how to be a team player and understand there's ups and downs throughout our process, so we have a lot of meetings to talk about those things and how to receive feedback. 

OHF: What experience do you have in hiring ProStart students?
Thieme:
I’ve hired many of them. When I was the Executive Chef at the Valley River Inn, we practiced there, and a lot of those students became employees. In fact, one of them just opened a restaurant of her own, and another just graduated from the culinary school at Johnson & Wales University on the East Coast. I've sent people all over the place and I keep in touch with them. Some of them gravitated towards management, in fact, one student worked his way up to be restaurant manager at the hotel and he continues to work in the industry to this day.

OHF: What would you say is the most rewarding part of being a mentor?
Thieme:
Seeing the students grow. There are so many that come in not knowing much or anything really, except they have a desire and it's initiated. I used to tell them ‘your DNA is going to change when you go through this process. And when you come out the other side, you'll be a different person.’ Some are so shy and timid, and they don't have a lot of self-esteem. To see them come out saying, ‘wow, this was a great experience and I know so much more’ really sets them up for life and beyond. ProStart is great for the restaurant industry but it’s also great for creating and helping people get into a whole bunch of different professions. ProStart has been a great vehicle to allow me and allow the students to actually achieve some huge goals in life. Not to mention, they know how to cook, and they know how to feed themselves at the end of the day. I couldn't do this without Miho, she is awesome! It really takes the two of us.

Will Leroux, Brewmaster, Public Coast Brewing
Mentor, Seaside High School 

OHF: How did you get involved as a mentor for the ProStart culinary program?
Leroux:
I kind of fell into it. When I first started working in Cannon Beach, I worked with Chef John Newman, who actually taught the culinary class at the high school, and he asked me to help with the class and do some mentoring and teaching with him. John helped with the team a couple of years until he opened his own restaurant, and then he asked if Josh (Archibald) and I would do it. We actually liked going in and helping out with the kids and doing extra things, so it kind of just fell into place.

OHF: How does this program help prepare students for a job in hospitality?
Leroux:
Teamwork is the biggest part of it. The thing with ProStart is that the kitchen really is a team. I played sports in high school and the teamwork part of it is having each other's backs. It's achieving something together as a group. I think the cool thing about it, is a lot of these kids aren't the athletic kids. They’re the kids that may have problems at home, where life hasn't given them a good hand of cards, you know. So, for them to be able to have something to work on with other people, and to trust other people–and us as mentors–was a big deal. That was worth every bit of it. When we prepped for the competitions, we’d try to do things that didn’t seem possible. We figured out a way to make a consummate in an hour. We made marshmallows by hand with a little hand eggbeater, just to make them see that there are possibilities and a way to do things that aren't always the norm. 

OHF: What are some lessons students can learn from industry mentors?
Leroux:
Leadership, accountability, teamwork and just being a good human. This was one of the highlights in my life and the fact that we were able to be successful and to share that success with those kids was pretty amazing too. The company that I work for is super, super supportive of the program as well. The class at the high school didn't have a lot of funds, so my company backed it up a huge amount, helping pay for all the food. If somebody is going to be a chef mentor, they need to integrate those kids into their kitchens. This industry can teach them a trade that they can then go out and use in their immediate adult life. Where most people would have to acquire an education in a college or trade school, these kids are able to walk out of this program and have an opportunity to get hired almost anywhere in any kitchen with skills.

Andrea Loeffler, ProStart Instructor, Forest Grove High School
Former Mentor, Tualatin High School

OHF: What motivated you to originally get involved as a mentor?  
Loeffler:
I was asked by a coworker of mine at the time if I wanted to take her place of mentoring as she could no longer commit. I thought it would be something I would do once and then move on, but I ended up mentoring for about 12 years. I worked with Heidi McManus where she teaches at Tualatin High School. I really enjoyed the break from the busy kitchen to just slow down a bit and get to know the students and teach them new skills. It was fun to watch the students each year learn and grow and become passionate about food. The time I spent in the classroom mentoring students prepared me for my own career change to run my own culinary program at Forest Grove High School. I would say I gained more from my mentoring experience than I ever thought possible. 
 
OHF: How valuable are mentors in helping provide real-world experiences to students?
Loeffler:
Now that I have been on both sides of this (past mentor-current teacher) I see how industry mentors help the teacher and the students greatly. Industry mentors give a real glimpse into what working in the industry is really like. Just by their drive and passion for food that they bring into the classroom, they really can get a group of students excited about food and working hard for what they want in life. It is great to share another Chef’s journey to success or skills they have to share with the students. We all took different paths to get to where we are, and I think it’s important for students to hear that.
 
OHF: What are some ways industry members can get involved with ProStart? 
Loeffler:
There are many ways industry professionals can contribute to the classroom as a mentor. Guest speakers are invited to the classroom to share knowledge on their subject area of expertise. Chefs and restaurant owners donate their valuable time and space to allow kitchen tours for students. Chefs that take the time to let students job shadow or do internships are invaluable. There is really no mentoring effort too small. Our students are excited and grateful to see, hear, and experience any knowledge industry professionals have to share.

ProStart® is a nationwide career technical education (CTE) program supported by the Oregon Hospitality Foundation that involves approximately 4,000 Oregon high school students from 40 schools around the state. Mentors provide overall support for ProStart students and help students make a real-world connection to their goals and the future. Visit OregonRLA.org/prostart for more information. | Courtney Smith, Oregon Hospitality Foundation, and Lori Little, ORLA

Predicting the Future: How Standard Costing Helps Increase Restaurant Profitability

4/5/2022

 
Plating food
​Guest Blog | My Accounting Team

Have you ever wished for a magic tool that forecasts costs and profit—and predicts the future? Since time travel doesn’t exist, there is no instant fix. But restaurants do have an incredibly powerful tool for looking ahead that’s underused: Standard Costing.

You’re probably familiar with the importance of COGS (Cost of Goods Sold). Industry practice often says that this shouldn’t be more than a certain amount (the standard is around 30%). Certainly, COGS data is useful. But there’s another approach that can dramatically increase profits. One accounting tool that is invaluable to running a more successful business based on real figures is Standard Costing. 

Relying on Cost of Goods Sold without getting Standard Costing is like getting a grade on a test, but not being told what was right, and what was wrong. We all need feedback to improve. That’s where Standard Costing comes in. Think of it as a “highlighter pen for profitability.”

Accountants are used to seeing blank stares when we ask, “What are your most profitable menu items?” Few things are more central to profitability. And yet, this data is often neglected. Predicting future costs is not like rent (where you quickly see what the rent hike impact will be). Relying only on COGS percentages may tell you there’s a problem. But that info can’t tell you where to look, or how to fix that problem. This is exactly where Standard Costing shines for restaurant owners and managers. 

So, what is Standard Costing? It’s an accounting tool to plan a more accurate budget. Standard costing lets you increase efficiency, raise profits and look ahead. Standard costing gives you what you need: a detailed understanding of both cost and quantity that go into a menu item. 

For example, let’s say you have a popular dish that uses an 8-ounce portion of chicken. If chicken is $2.50 per pound, the standard cost per plate for that chicken dish would be $1.25. Add up all the components. Now you have the standard cost. Subtract the standard cost from the menu price. Now you have the profitability for that item—at least from a theoretical perspective. We can make standard cost more accurate by adding in additional factors: wastage, shrinkage during cooking, portion control, and theft. Now we have something valuable. We shift from the theoretical to the real cost.

This detail is golden. You can use standard cost to enhance your business model. You can more realistically price menu items. You can investigate wastage. You can also promote certain items based on profitability.

But wait—there’s more. Say you have a business model forecasting COGS will be 30% of revenue, but it’s actually 33%. After analyzing your standard costs, you find that most items are around 30%. But a couple of items are 40%. Now you know what is causing the problem. Now you can decide how to fix it. Perhaps it’s re-pricing. Perhaps it’s revised portions. Perhaps it’s a combination of multiple changes. This is the power of Standard Costing. It’s like a magnifying glass to find and address red flags and potential issues. 

One more problem that Standard Costing solves is the large gap between your POS and bookkeeping data. This is every restaurant owner’s nightmare. You calculate the theoretical COGS from the items in your POS. But what happens when the actual bills are much higher? Where is the disconnect? It could be inadequate portion control, wastage, or theft. 

To solve this problem, you need a starting point. The overly broad analysis that “COGS is too high” isn’t much help. Standard costing, though, provides the data points so you make a few changes and get significant results.

Most restaurateurs understand that menu placement has a significant impact on order frequency. Standard Costing tells you which items are the most profitable, so you and your staff know which items to push. The same logic applies to promotions. Without Standard Costing, you’re guessing. Standards save time. Standards increase profits. Standards find problems. And standards help achieve goals.

Unfortunately, Standard Costing isn’t a magic fix or a “one-and-done” analysis. Material prices fluctuate. Doing this kind of analysis takes time. Most restaurateurs go into the business because they love the business, food, and communities. If sheet pans are more your style than spreadsheets, it may not be your task to do planning and profit management with Standard Costing. But it could be someone else’s.

About:
Bruce Lange is the Chief Financial Officer of My Accounting Team (MAT). He has three decades of experience in Finance and Administration, having worked with organizations from small start-ups to multinational corporations like Oracle. MAT offers simple, secure, scalable cloud-based bookkeeping and accounting services. Contact Bruce and the team at MAT at sales@myaccountingteam.com or 541.844.1484.


This guest blog was submitted by My Accounting Team. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.

ORLA Update: April 1, 2022

4/4/2022

 
RRF Replenishment / OSHA Updates / H-2B Visas / US Labor Department Investments

We are seeing signs of sales getting close if not reaching pre-pandemic levels for some Oregon operators. Of course sales numbers don’t tell the whole story for our restaurants given the cost of goods and the ongoing impacts of a marketplace driven by historic leverage in the hands of employees. On the lodging side it continues to be a tale of two realities with operators seeming to do quite well in secondary markets with Portland still working to find its footing with the delay in corporate/conference travel. Spring/Summer live events and the return of the full fledged Rose Festival events for a month from late May through late June will certainly help Portland turn the page. 

RRF Replenishment Votes Possible in House, Senate
The U.S. House of Representatives is expected to vote on legislation to replenish the Restaurant Revitalization Fund as early as this Wednesday. Details on the size of the bill, and whether it is funded with new government spending or reallocating existing federal dollars remain unknown. Meanwhile, if the Senate is able to reach agreement on legislation to fund COVID treatment programs, Democrats are expected to offer an amendment to replenish the RRF. Senate Republicans have been clear in calling for any COVID spending to be fully offset by cuts in other government programs, and will vote against RRF replenishment if this condition is not met.

ORLA has been working with the National Restaurant Association on your behalf to urge that Congress not treat the 177,000 restaurants waiting for COVID grants as hostages to battles over government spending. The National Restaurant Association sent a letter to the Hill this morning in support of RRF votes and posted a press release urging support from Congress. We will keep you informed if a vote occurs and when the next grassroots activation will launch.

OSHA Update on Workforce Housing
One of the many unintended consequences of agency rules during Covid was the impact of workforce housing restrictions on our resort communities around the state. Oregon OSHA was focused on preventing the spread of Covid in agricultural worker housing specifically, but their rules also prevented resorts around Oregon from housing hospitality employees within residential vacation homes. The Covid rule limited the number of workers who can be housed in resort vacation homes–and those limits did not exist for vacation travelers from different households using those same homes. ORLA pointed out this inequity over the course of the past week and thankfully Oregon OSHA responded. OSHA just released a Workplace Advisory Memo on April 1, 2022, that removes these workforce housing limitations in our industry.

H-2B Visas
American Hotel & Lodging Association President & CEO Chip Rogers (who will be joining us in person at September’s ORLA Hospitality Conference in Eugene) shared the following good news this week on H-2B Visas. A number of ORLA members utilize Visas for seasonal employment needs and expanding capacity has been a priority for the industry.

The Department of Homeland Security (DHS) and Department of Labor (DOL) announced they would make available an additional 35,000 H-2B visas for the second half of fiscal year 2022 (FY22), which begins April 1. Of these, 23,500 visas will be available for returning workers, while 11,500 are reserved for nationals of Haiti, Honduras, Guatemala, and El Salvador. In December, for the first time ever the Departments released an additional 20,000 H-2B visas for the first half of the fiscal year. These additional visas will provide critical help to seasonal resorts as we enter the busy summer travel season, and they suggest that the Biden Administration recognizes the acute workforce shortage we are facing. AHLA will continue to push for legislation and policies that will help fill open jobs and keep us on the road to recovery.
 
US Labor Department Investments
This week the National Restaurant Association shared more details on President Biden’s federal budget proposal which includes an 18% increase in U.S. Department of Labor funding from 2022 levels ($2.2 billion more) with $400 million proposed to go towards the hiring of additional staff within the department’s workforce protection agencies. Here are the cliff notes from the administration's proposals that are more industry specific:
 
Labor & Workforce
  • $2.2B in new funds for the U.S. Department of Labor, an 18% increase.
    • $397M more for worker protection agencies. Document says DOL worker protection agencies lost 14% of their staff from 2016 to 2020, limiting their ability to perform inspections and conduct investigations.
  • $118M more to expand Registered Apprenticeship (RA) opportunities.
  • $765M for U.S. Citizenship and Immigration Services (USCIS) to administer the immigration system.
 
Food Supply Chain and Competition
  • $10M for USDA to protect individual producers against price manipulation by large food processing companies.
  • $1.2B for the Food Safety and Inspection Service, with an increase of $134M to hire more food inspectors.
  • $230M for the Port Infrastructure Development Program building maritime freight capacity.
  • $1.7B in spending for the Harbor Maintenance Trust Fund to move goods through ports and waterways faster.
  • $43M in new investments in food safety modernization. Building on the FDA Food Safety Modernization Act, this improves prevention-oriented food safety practices, strengthen data sharing and predictive analytics capabilities and enhance traceability to more quickly respond to outbreaks and recalls for human and animal food.
    • This funding could be used to implement the FDA’s proposed food safety traceability rule that will affect restaurants.
 
Technology and Competition
  • $88M for the Antitrust Division of the Department of Justice (ATR) and $139 million for the Federal Trade Commission (FTC) to “promote marketplace competition through robust enforcement” of antitrust and unfair and deceptive trade practice laws.
    • These investments could spur future regulatory actions around anticompetitive business practices in areas like the electronic payment ecosystem.
    • The FTC would be responsible for creating and implementing standards for a national data privacy and security framework, if such a plan advances in Congress.
 
Access to Credit
  • $9.5B increase for SBA’s flagship 7(a) loan guarantee program, the 504 loan program for fixed assets, Small Business Investment Companies, and the Secondary Market Guarantee program.
  • $20M to help veteran and service-disabled veteran-owned small businesses to access business opportunities across the Federal Government.
  • $50M for an EDA pilot program (via Commerce Department) to address structural prime-age employment gaps and boost competitiveness in persistently distressed communities through innovative, flexible, and locally-led grants.
 
Healthcare
  • A new requirement that all private health plans must cover mental health benefits and ensure plans have an adequate network of behavioral health providers.
  • Creates a new Vaccines for Adults (VFA) program, which would provide uninsured adults with free access to all recommended vaccines.
 
For more information:
  • Biden Budget Proposal
  • Treasury’s Explanations of Revenue Raising Proposals

We look forward to sharing more about workforce development efforts in future reports. There is a lot of work going into improving connections between industry operators and high school/community college classrooms. Give us a call at 503.682.4422 if you have any questions. | ORLA

Employee Retention Tax Credit: The Benefit That Keeps On Giving

3/31/2022

 
ERTC graph
Since its rollout last year, ORLA has consistently reported on the potential benefits of the Employee Retention Tax Credit (ERTC). The benefit is still available but time, and patience, is critical. Application for ERTC is open to any qualified employer who has filed a 941 tax form from March 12, 2020 (when the program started) through September 30, 2021 (when the program ended). This credit helps any qualified employer– not just restaurants and lodging operators– put their hard-earned money back into operations. 

Just ask John Barofsky, current ORLA Chair and co-owner of Beppe & Gianni’s Trattoria in Eugene. “Being a small independent operator, the ERTC was an unexpected but welcome boost to my operation’s ability to stay open and maintain staff through the pandemic. Although at first the process of the credit seemed daunting, the time I spent was well worth the return. The ability to defray payroll costs and tax payments had a great impact on my cash flow and bottom line.”

Another ORLA member who benefitted from ERTC is Drew Roslund with the Overleaf Lodge & Spa and The Fireside Motel, both in Yachats, Oregon. “The ERTC was comparable in size and scope to the Paycheck Protection Program for many organizations. It was tough waiting seven to eight months for refunds but just knowing that we qualified gave us enough confidence to keep team members employed and increase wages, especially during the busy summer season on the Oregon coast. Roughly the equivalent of a month’s worth of gross revenue, we were able to lock in some necessary incentive pay for key staff and even tackle a few deferred maintenance projects.”

To review, the original ERTC program was enacted by the CARES Act in 2020 and allows a tax credit of up to 50 percent of each employee’s share of social security qualified wages, per year. With the Consolidated Appropriations Act of 2021, the ERTC program was expanded to allow a tax credit of up to 70 percent of each employee’s share of social security qualified wages, per quarter. The 2021 Act added a 500-employee maximum [1] for employers who could access the ERTC program. As of this writing, the final change in the ERTC storyline came with the passage of the Infrastructure Investment and Jobs Act in 2021, which terminated the ERTC on 9/30/21, instead of terminating on 12/31/21.

That last change effectively repealed an employer’s tax credit for Q4-2021, but ORLA members are strongly encouraged to research and apply for all ERTC benefits that are due to you. Even though the program ended one quarter earlier than originally planned, ERTC is available to qualified employers and wages for a portion of seven quarters - March 12, 2020, through September 30, 2021.
 
Employers that did not claim the ERTC on their original Form 941 may retroactively claim the credit by filing Form 941-X. It is important to note that employers have three years from the date the original return was filed, or two years from the date the taxes were paid, to file Form 941-X and claim the full credit.

Two areas of caution for operators: First, with the high volume of ERTC applications pouring in across all industries, it is not uncommon to wait nine months or more for refunds to be processed and received. Second, for those operators who applied for and received a tax credit for Q4-2021, the repeal of ERTC for that particular quarter triggers a negative situation where employers that already claimed an advance payment of the credit for wages paid after September 30, 2021 and received a refund on those wages must repay that refund. Employers that held back payroll tax deposits for Q4-2021 in anticipation of the ERTC for that period must deposit those amounts retained on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date).[3]

Note, this article serves as a general guideline and should not be construed as tax advice. Owners/operators should always seek their own tax counsel to take full advantage of accounting treatments, including ERTC, that minimizes tax liability and maximizes tax credits and refunds. If you are looking for assistance with this process, consider reaching out to Adesso, a new ORLA partner helping industry members navigate the complex and time-consuming ERC filing process. Visit AdessoCapital.com/ORLA for more information or contact your ORLA Regional Representative. You can also listen to ORLA's Boiled Down podcast episode #41, ERC: How to Get the Money You May Be Owed.

ORLA hopes you are able to join many other operators who have found profitable results from the Employee Retention Tax Credit program. Good luck and many happy returns. | Tom Perrick, Advocate for the Hospitality Industry

This article originally appeared in the Spring issue of Oregon Restaurant & Lodging Association Magazine, pg. 16.

1 How To Claim The Employee Retention Credit For The First Half Of 2021, Journal of Accountancy, April 5, 2021
2 Tri-Merit, LLC 2021
3 BDO U.S., For Employers Who Took ERTC for Fourth Quarter 2021 Wages, December 2021).

ORLA Update: March 22, 2022

3/22/2022

 
eggshells
Food Scrap Policy, Customer Entitlement, and March Madness

Business Food Scraps Policy In Play – Implementation of a regional food scraps separation requirement went into effect March of this year and many businesses within the Portland Metro boundary will need to comply by 2023. Originally scheduled to begin in March 2020, the requirement was delayed by two years due to the impacts of COVID-19 on the region’s residents and businesses. The earliest any business must be in compliance is March 2023 and all businesses generating more than one 60-gallon roll cart of food scraps a week must be in compliance by September 30, 2024. View more information about the requirement and how to access resources for implementation on Metro’s website at Oregonmetro.gov/foodscraps.

Multnomah County Candidates Forum April 20 – There continues to be a lot at stake in Portland with how we are managing safety and security issues as we start getting a taste for what Spring and Summer looks like in the Portland region with the activity surrounding March Madness. Some of you are seeing sales numbers returning to acceptable levels as of this month for the first time in a long time. One of our goals is to not let our elected leaders off the hook in understanding the significance of our debt loads just to get to the point where we could be open and start seeing customer demand improve again. ORLA is co-hosting along with several other business organizations an upcoming forum on April 20 focused on Multnomah County Commissioner candidates. Visit Portland Business Alliance's website for details.

OTLA 3rd Year Class Launch – This past week the 3rd year class for the Oregon Tourism Leadership Academy (OTLA) gathered in Sunriver immediately following the Oregon Governor's Tourism Conference. ORLA had the chance to sponsor one of the keynote sessions at the Conference and showcase a new promotional video to bring more awareness to the Oregon Tourism Leadership Academy and opportunities for tourism professionals to get more involved in the program. Subscribe to updates on OTLA and view the new video.
 
Customer Entitlement? – A 2022 pilot study from OSU Cascades Hospitality Management program shared by the program's director, Todd Montgomery, confirmed what they have been hearing during focus groups and personal interviews for years: entitled customer behavior is getting worse, and it is impacting the desire of hospitality workers to stay in the industry. OSU Cascades will present a white paper on all of their results in the coming months where they will address workers perceptions of what is driving these customer entitlement events. In the meantime, you can view their latest infographic.

Learn more about how the Oregon Restaurant & Lodging Association is protecting and promoting Oregon's hospitality industry at OregonRLA.org.

ORLA's 2022 Legislative Session Highlights

3/15/2022

 
Below are some highlights from the 2022 Regular Session. A more comprehensive list of bills ORLA tracked can be found in the Bill Tracking Report.

SB 1514 – Pay Equity
Originally a placeholder bill, ORLA monitored this bill as it became a vehicle to extend the ability of employers to offer hiring and retention bonuses. Because of the pandemic and government shutdowns of Oregon restaurants, many operators found themselves needing to offer hiring and retention bonuses to staff or prospective staff. The extension allows for businesses to continue to offer these bonuses without running afoul of Oregon’s Pay Equity Law until September 28, 2022, or 180 days beyond the expiration of the Governor’s Emergency Declaration which occurs April 1, 2022.

HB 4015 – Entrepreneurial Loans
ORLA supported this bill to help expand eligibility for state entrepreneurial loans and raise the per-loan limit from $500,000 to $1 million. This bill passed and was signed by the Governor on March 2, 2022, becoming effective immediately.

HB 4101 – Smoking Bill
ORLA initially opposed this bill which would have increased the distance from businesses at which someone could smoke from 10 to 25 feet. After an amendment in the House excluding OLCC-licensed businesses was passed, ORLA was neutral on the bill, but it died in the Senate.

HB 4152 – Franchise Bill
This was essentially the same bill that was introduced last session. ORLA opposed this bill which, among other provisions, would have allowed franchisees to use the brand name but nothing else related to the brand identity, quality, or reputation. Although the bill died in committee, we do expect the bill to return in the future and there is the possibility an interim legislative session committee or workgroup might review this issue.

HB 4153 – Creative Opportunity Fund
This bill established an “Opportunity Fund” equal to a dedicated two percent portion of the overall Oregon Production Investment Fund (OPIF) each year that could then be used for workforce development, employment training and mentorship, project and filmmaker grants, content and creator development, small business and regional production development, amongst other things.  ORLA supported the bill for the economic and tourism opportunities available when these investments occur.  The bill passed the House and Senate and as of this writing, was waiting for the Governor’s signature.

Questions? Contact ORLA Director of Government Affairs, Greg Astley.

Welcoming a New Era of Consumers

3/11/2022

 
Guy with phone
Guest Blog | Togather Restaurant Consulting

Gen Z is the first generation to have been raised entirely in the digital age, and there are numerous ways they are changing the world around them because of it. They’re buying more vegetarian and plant-based products, they’re eating local and fresh ingredients, and they’re ordering everything off of their phones. While we still have quite a few years before Gen Z generates their own buying power, we should look at their trending needs now so we can better understand this emerging market. 

Let’s talk about what it means to be raised in the late 90s and early 2000s. These people recall 9/11, the wars in the Middle East, and the economic crash of 2008 as their earliest childhood memories. Whether through reports on climate change, economic crises, or pandemic response, the people in this group have been raised in a tumultuous time. They are looking to change how humans function in society. These young people have hope in their eyes for a better future, and this affects how they interact with the world around them. 

Gen Z is more likely than any other generation to eat a vegetarian meal. Why is that? Statistics have shown that the meat industry is distressing the environment and incredibly expensive. Both the farming of meat and its transport have impacted this. Being raised in an era of political documentaries and environmental awareness, this generation is keenly cognizant of their personal consumption and its impact on the world. Therefore, they’re more willing to replace a meal with a vegetarian option if it means reducing their carbon footprint even the barest amount. So, let’s look at making tastier meatless meals. Great strides have been made in the meat-replacement market. We now have meat-replacement products that bleed hemoglobin-adjacent proteins so that you’re not losing that bit of flavor when you’re chowing down on a plant-based burger. Products like this are selling very well. Having these options excites Gen Z, and they’re willing to dole out an extra $2 for a meat replacement product. Small efforts can be made to integrate these products into your menu, all while easing the minds of a generation that cares about the impact of their dietary habits. 

Eating locally is also at the forefront of their minds. Gen Z is 75% more likely to eat from a restaurant that advertises locally-sourced ingredients (Source). There are a lot of factors for this, but the most glaring ones are the impact that cross-country distribution has on the environment, and the fragility of that supply chain became self-evident during the Covid-19 pandemic. From a young age, these people have had fuel emissions and carbon footprints on the brain, so it makes sense that they would be hyper-aware of how far their food traveled to get to them. Thankfully, food distributors have made it easier for us to shop locally – even large distributors can connect you with regional goods. 

Being raised completely submersed in technology has also impacted Gen Z. Many were toddlers when the first iPhones came out, and now their phones are permanently in their pockets. They don’t go anywhere without them, and the rest of the world isn’t too far behind. This has made dining out a completely different experience than we ever anticipated. Today, QR codes are quite common in restaurants and Gen Z has been the number one fan of this ordering system as of late. While some people prefer a more traditional approach to dining out, this generation is likely to opt for this human-less route of food ordering and delivery. Some restaurants are even looking at automatic food runners to cut down on labor as well.

With this understanding of Generation Z, let’s take a look at implementing these changes in your business. We don’t need to anticipate Gen Z dominating the market for a few years, as most of their buying power is sourced from parents and guardians. We won’t see major shifts in our market until they transition fully into independent life. Slating gradual changes to accommodate them, starting now, will put your business a step ahead of the times. Adding vegetarian meals to your menu, sourcing your ingredients locally, and using the labor-saving advantage of QR code ordering are great ways to draw the eye of this generation. Though young, Gen Z spent $111 billion on eating out in 2021 (Source), and that’s without factoring in alcohol sales. This market is only going to become more viable as Gen Z continues to grow – and we should be prepared to tap into it. | Kate Ratledge, Togather Restaurant Consulting


This guest blog was submitted by Togather Restaurant Consulting. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.
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