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Looking Ahead at Rhode Island’s Economic Outlook

Dale J. Venturini, President and CEO of Rhode Island Hospitality Industry Association.

Dale J. Venturini, President and CEO of Rhode Island Hospitality Industry Association.

By Dale J. Venturini, President & CEO, RI Hospitality Association

Last month, the RI Hospitality Association (RIHA) hosted its 18th Annual Economic Outlook Breakfast, providing a deep dive into how Rhode Island’s vital hospitality industry will fare in 2022. While the event was virtual, it was well attended by hundreds of industry professionals. Panelists included Hudson Riehle, Senior Vice President of the Research & Knowledge Group at The National Restaurant Association, who provided insight into the restaurant industry; Rachel Roginsky, Principal of Pinnacle Advisory Group, who offered data and perspective in the lodging industry; and Heather Singleton, Chief Operating Officer of RIHA and the RI Hospitality Education Foundation (RIHEF), who discussed how the workforce looks in the year ahead.

Analysis on these fronts suggest that in 2022, Rhode Island can expect the restaurant industry and the lodging industry to continue its encouraging, slow recovery process in the wake of the COVID-19 pandemic. According to Roginsky, Rhode Island’s lodging industry saw an impressive rebound in 2021, experiencing a 76.73% increase in RevPAR (revenue per available hotel room) in July 2021 when compared to July 2020, but is still down 18.04% since 2019.

Roginsky analyzed the lodging markets in Providence, Warwick, Newport, and Middletown. Providence saw a modest increase of 32.93% in RevPAR from 2020, but the market is still down 48.15% from 2019. Warwick, too, shows an increase from last year. With more passengers arriving at T.F. Green International Airport, a significant decrease in unemployment and a recovering economy, Warwick’s RevPAR increased 52.38% from 2020, but is still down 7.23% since 2019.

On Aquidneck Island, Newport experienced a substantial increase in both ADR (average daily rate) (up 38.6% from 2020, and up 20.12% from 2019) and RevPAR (up 114.1% from 2020, and up 10.4% from 2019). Finally, Roginsky analyzed the Middletown market, noting that ADR is up 28.73% from 2020 and 7.07% from 2019, and RevPAR is up 92.54% from 2020 and 0.21% from 2019.

Hudson Riehle addressed the economic backdrop and performance of the restaurant and food service industry nationally. According to Riehle, national restaurant sales are projected to remain approximately $110 billion below pre-COVID-19 levels but are still projected to be $120 billion higher than in 2020.

Employee recruitment, COVID-19 concerns, and food costs are the biggest challenges that restaurant operators are facing in 2021. According to Riehle, hospitality job openings jumped 119% between January and June of 2021 while the growth of labor costs is accelerating with average hourly earnings increasing by 5.2% in 2021, compared to 3.2% in 2020 and 3.8% in 2019.

Riehle predicts an industry in transition with strong geographic variations in performance to close out 2021. While uncertainty will continue into 2022, a greater emphasis will be placed upon food delivery, carry-out, drive-thru service, alcohol, value-added products, and digital service with consumers continuing to manage their spending.

Heather Singleton, who spoke on behalf of RIHA/RIHEF, discussed key statistics affecting the Rhode Island labor force, as well as leisure and hospitality employment on a national scale. According to her findings, Rhode Island’s unemployment rate in July was 5.8% compared to 14.0% in July of 2020. Similarly, the United States’ unemployment rate in July was at 5.4% compared to 10.2% in July of 2020.

According to statistics provided by the American Hotel & Lodging Association in a recent survey, nearly 500,000 established hotel jobs will be lost by the end of 2021 nationally since the onset of the pandemic. Rhode Island is predicted to lose 1,378 of its existing 4,267 hotel jobs in 2021, marking a 24.4% loss.

A recent National Restaurant Association survey found that for the first time since December of 2020, restaurant jobs declined on the national level with 41,500 jobs cut in August. During the seven months prior, the industry had added 1.4 million jobs nationally.

The net-net is that Rhode Island’s recovery process is ongoing, albeit slowly. Many factors stand in the way of a full recovery including supply-chain, workforce, food costs and continuing consumer confidence issues in the wake of the lingering COVID-19 pandemic. But all projections do point to a better 2022.

A veteran of more than 25 years in the hospitality industry, Venturini is considered by many to be the voice of the industry in the state of Rhode Island. She has been instrumental in improving the industry’s educational and training programs in the state, as well as enhancing the bottom line of the business she represents. Venturini splits her time between the office and the State House, a constant presence for her membership.

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