Rhode Island has seen strong growth in what customers are paying for rooms, and the number of people staying at hotels has jumped, Mashburn told the Globe after the meeting, but she said that’s going to moderate.
“Nationwide and our state, in each of our markets, we have seen tremendous growth year over year — 2021, 2022 and even 2023 post-pandemic. But that can’t continue, right? Because people are becoming more price conscious,” she said.
The Ocean State is still recovering from the pandemic, currently seeing room revenues at about 96 to 98 percent of where they were in 2019, Mashburn said, driven by leisure demand. That’s below national levels, which have exceeded pre-pandemic rates and are now at 113 percent.
“Leisure demand is what brought the country and Rhode Island out of the pandemic,” Mashburn said. “What is hurting us now, which we have the most opportunity or hope to gain, is the corporate travel.”
Business from travelers visiting in groups for corporate or social reasons is getting closer to pre-2020 years, she said.
“I’ve seen plenty of writing about how people are doing more group business now because they are working remote, so they need to come together. So, that’s good for hotels,” Mashburn told the Globe.
Sensitivity to prices is also impacting the restaurant business.
Americans are still eating out, but there are signs that they are now more careful about their spending.
“We’ve seen traffic in restaurants decline,” Chad Moutray, vice president for research and knowledge at the National Restaurant Association, told the Globe.
Moutray pointed out at the Hospitality Association’s meeting that restaurant sales across the country have stayed flat over the last few months.
Meanwhile, concerns over the direction of the economy are growing. In August,restaurant operators said that was a top challengecompared to the last two years when they were more worried about finding workers.They expect the US economy will slow over the next year, Moutray said, pinching people’s ability to spend.
Moutray does not expect the country to face a recession, but told the Globe slowing economic conditions would be felt in Rhode Island. “I think it’s clear that some of those national trends are translating over to Rhode Island as well, [you’ll] continue to see some cooling of overall spending,” he said.
Going forward, the outlook looks mixed for the state.
Moutray told the gathering on Wednesday that total employment in Rhode Island was projected to decelerate in 2025, while people’s incomes were forecast to improve.
“At the end of the day, [the] restaurant and hospitality sectors are vital to the economic growth of Rhode Island and you have a lot of opportunity for continued growth here over the coming years,” Moutray said.
He added that nationally, employers in the industry were still retaining workers and stopping short of laying off employees.
“Hiring has slowed. I don’t see an increase in layoffs. Where I see changes happening in terms of some of that softening is perhaps some reduced hours or just some slowing down of overall hiring,” Moutray told the Globe.
Rhode Island has seen its labor market soften recently. The accommodation and food sector has shed 3,500 jobs over the last three months.
Heather Singleton, the chief operating officer for the Rhode Island Hospitality Association, said that businesses were still looking to hire, but recruitment tends to shift depending on seasons. In pockets of the state like Newport or Block Island, hiring tends to slow during the winter, while in areas like Providence, employers were more likely to bring in new workers throughout the year.
Meanwhile, Rhode Island is seeing smaller, specialty food service operators emerging, she said,giving residents options in addition to traditional restaurants.
“Like a quick service counter, like coffee shop, type of place. But there are still formal sit-down places too that are opening. But I see more of like, smaller menus, limited service,” Singleton told the Globe. “That’s a new area that I see growth in.”
Singleton suggested that employers needed to work harder at bringing in new workers and keeping current employees.
“As far as employers are concerned… they’ve got to be recruiting and retaining at the same time,” she told the Globe. “Especially in Providence, Warwick area, like the metro area, they need to be recruiting every single day… You’ve got to have people in the pipeline.”
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Omar Mohammed can be reached at [email protected]. Follow him on Twitter (X) @shurufu.
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Publish date : 2024-09-05 23:00:00
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