ORLA Update: June 17, 2022

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!