Labor shortage poses biggest question for Michigan summer travel as restrictions lift

The general manager at Rochester’s Royal Park Hotel was washing dishes at the in-house restaurant last week while donning a three-piece suit.

There was nobody else to do the work. And the dishes were dirty.

Royal Park has turned customers away – not for a lack of rooms, but because there weren’t enough people to clean them.

There are job applicants. But 70% don’t show up for an interview, said owner Frank Rewold during a Michigan House committee hearing Thursday.

Demand for eating out and traveling is through the roof in Michigan as the pandemic wanes, but industry leaders aren’t sure they have the staff to accommodate bigger crowds.

“I suspect you will see many restaurants and hotels go out of business in the next few months due to this situation, which has reached an extreme crisis level,” Rewold told the committee.

While everything can reopen at 100% starting June 22, many business owners say they don’t even have the staff to cover 50%. Staff shortages are “far and away” the bigger concern this summer, said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association.

A May MRLA survey found “recruiting and retaining enough employees” was the top issue for 72% of restaurant operators. In April, that was the top issue for 57% of restaurants. In January, it was the top issue for only 8% of restaurants.

“If you have every staff member you’re looking for and have the ability to expand to 100% with ease, you are the distinct minority in the restaurant industry,” Winslow said.

Despite a lack of workers, Michigan still has between 600,000 and 900,000 people claiming unemployment benefits every week. That’s about 15% of Michigan’s labor force.

RELATED: Work search requirements for unemployment benefits return in Michigan

Republicans and business owners want Michigan to join 25 other states in ending the extra $300 of weekly unemployment benefits from the federal government – which isn’t set to expire until early September.

The state House voted to do so Thursday, though the measure is unlikely to get the OK from the governor if it were to pass the Senate.

Many also want Gov. Gretchen Whitmer to cut other federal unemployment benefits, which offer money to workers out of a job who aren’t eligible for state benefits.

Whitmer has refused. Twenty-six states have decided to take the $300 benefit away – with Louisiana being the only Democrat-led one.

“The problem is, people don’t want to work,” said Rep. Gary Eisen, R-St. Clair Township, who also owns a business. “You need to work. You need to make a house payment. You need to buy food. You need to make a car payment. And we took that need away. The government came in and screwed everything up. We have to create that need again … people will want to work then, because they have to.”

Many businesses have raised wages in hopes of attracting workers.

John McGee, who owns five restaurants in the Traverse City area, told the Michigan House committee he’s raised wages 20% to 35% to an average wage of $23 per hour. He’s still having staffing troubles.

At Baldwin’s Smokehouse in Saginaw, owner Roy Baldwin said the business is in “survival mode.”

“We can’t pay the amount of money that people can make just staying home and doing nothing,” Baldwin told the committee.

Signing bonuses and perfect attendance awards are among the perks at AJ’s Walleye Lodge in the Upper Peninsula’s Lake Gogebic, said owner Mary Beth DeFazio. It’s not enough, she said.

“We just need to … create some motivation for wanting to go to work,” DeFazio said.

Other factors at play?

Throughout the pandemic, the fear of COVID-19 kept many people from taking jobs. But Michigan now has about 200 new coronavirus cases per day, compared to 7,000 per day in mid-April. And free vaccines are widely available.

Eliminating the remaining COVID-19 health restrictions are another signal that it’s safe to work, said Michigan Chamber of Commerce President and CEO Rich Studley. He called for an end to the COVID-19 restrictions for months and believes Whitmer should cut off the federal unemployment benefits.

“Sometimes it seems as though the governor and her administration just don’t understand what it really takes to be economically competitive,” Studley said.

Immigration is a less-talked about – but equally valid – piece of the labor shortage, said Dave Lorenz, vice president of Travel Michigan.

Limits on immigration during the Trump administration and throughout the pandemic may have also had an effect on the workforce – especially for this summer, Lorenz said. Immigrants fill lots of agriculture jobs as well as resort jobs in places like Mackinac Island, he said.

“They have been able to get here, just not enough of them,” Lorenz said. “We need more of these seasonal employees coming back to provide the experience the travelers want and also (fill) the jobs that Americans don’t want.”

When immigration is limited, more workers opt for places like Florida – which can offer hospitality jobs all year, instead of Michigan, where they’re needed most during summer months, Lorenz said.

Are people ready to travel?

Advanced bookings for Michigan hotels have taken off in recent weeks, Lorenz said. Web traffic for Michigan travel sites are “off the charts,” he said, which is another indicator for a busy summer.

People are itching to get out after a year of limitations. Extra disposable income and stimulus money are allowing many to spend more.

“It’s coming back to life,” Lorenz said. “You can tell that people are absolutely ready to travel.”

Travel Michigan’s research shows most people still want to stay relatively close to home, like last year. Lorenz is a bit concerned about 2022, if there’s pent-up demand for residents to travel further away or internationally.

RELATED: Hot vaxx summer and a labor shortage: Up North braces for tourism surge

Northern Michigan was the biggest winner last summer as many sought outdoor experiences away from groups of people. Industry leaders hope bigger cities can join in the success this summer, but still expect going Up North will be the most popular.

Last year was “one of the best summers in history” for the tourism industry in the U.P., said Tom Nemacheck, executive director of the Upper Peninsula Travel and Recreation Association.

“It was kind of strange to think that we (had) an advantage with a pandemic,” Nemacheck said. “So many people have been ill and sick and everybody’s hurting from all this. But our tourism economy just happened to be in the right location with the right product.”

Leaders expect record numbers again in 2021. Spring numbers have started very strong, Nemacheck said.

“All these new people have been here now,” Nemacheck said. “They tell other people and it just keeps going from there. … It’s going to pay off for us for years to come.”

Yet, their biggest question mark is no different from anywhere else – how to find enough workers.

“Everybody is short of help,” Nemacheck said of the U.P. and the U.S. as a whole. “They can advertise until hell freezes over, and they’re (still) not getting the people to come work.”

Travelers are ready to feel like life is back to normal. While hospitality leaders are thrilled to be up and running, they hope customers are understanding of their situation.

“Be patient. Be kind. Tip big,” Winslow said.


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