The Return of Risk-Taking: Restaurant & Hospitality Sector Choosing Growth

The National Restaurant Association (NRA) and STR Global have each recently published reports that indicate solid industry growth for restaurants and hotels in 2014. Many operators are enjoying solid gains and investing those funds back into their companies in the form of capital expenditures and additional units.

The most striking stat to me from the NRA’s December 2 report is that restaurants in the US have added 1,000 jobs EVERY DAY this year. That’s amazing, especially since less than 30% of restaurant operators believe economic conditions will improve in the next six months. What’s going to happen when they start drinking the Kool-Aid?

Like most small business owners, I am an optimist who is always leery of the “downside.” Oxymoron, I know, but it’s hard to ignore the Dow, NASDAQ, packed shopping malls and movie theaters. Meanwhile, the cost of air travel has quietly inflated while hotel KPI’s are very strong. That tells me the people approving business and leisure travel budgets are absorbing the higher costs.

Of the lodging conglomerates that reported their Q3 average daily rate (ADR) and revenue per average room (RevPAR) to STR Global, over 90% of them experienced increases. Hoteliers in the luxury segment posted ADR gains of 7-9% compared with 4-6% at midscale properties. Some luxury operators saw RevPAR gains of 10-20%. Hotels are making up for ground that was lost in the aftermath of the Great Recession.

Hospitality Sector Expansion Effects On Your Staffing

As expected, the relationship of Quits vs. Layoffs and Discharges as reported by the US Bureau of Labor Statistics continues to widen. In plain speak, this means that more and more employees are taking the risk of resigning from the safety of their employment for the promise of a better job. This is a stark contrast to 2009-2010 when employees were clinging to their jobs and 2011-2012, when many employees remained reluctant to make a change (reference BLS Charts 6 and 7).

On top of this ongoing progressive employee behavioral shift, restaurants are adding staff at a pace that is more than double the national employment rate. Hotels are not too far behind. Other talent shortage factors include the workforce loss of 10,000 Baby Boomers each day, and challenges attracting and retaining the Millennial Generation.

You’re going to need more recruiting power than a job posting on an over-crowded website.

You Need a Headhunter

That’s right. I said it. A Headhunter.

The hundreds of clients we have successfully served over the last 12 years know the only way to access best-in-class talent to move their business forward, especially during a shortage, is to partner with Strategic Hospitality Search.

Here are just a few recruiting success stories from our 50+ placements in 2013:

  • A Celebrity Chef in a major southern metro tapped us for the perfect General Manager and Assistant General Manager to open what has become one of Gayot’s Top 10 New Restaurants in the US
  • A five unit operator in Ohio called us, exasperated by their inability to hire a corporate chef, unit chefs, and unit managers, and we placed six great candidates into positions that poise this employer for further growth in 2014
  • A few of the SHS placements:
    • Director of Beverage Innovation at a major casual chain
    • Director of Culinary R&D at a major manufacturer of appetizers, entrees and sides
    • Director of Culinary R&D at a mid-size manufacturer of dairy and meat products
  • We provided expert leadership solutions for a $Multi-billion contract food service provider by placing three new regional directors – two culinary and one food and beverage
  • A Texas operator made its debut in Chicago, and we contributed to their success by placing three superstar local candidates in key positions – Executive Chef, AGM, and Manager
  • We contributed to the rapid growth of an international entertainment company by recruiting local talent in their northeast and southern expansion markets well in advance of their openings

As our clients see improving conditions and choose to grow, so do we. Strategic has added staff this year, including the new Strategic Corporate Search division to serve our clients at the corporate level in human resources, accounting, finance, marketing, sales, and administration. We’re bumping out our office to double our staff in 2014 so we are prepared to meet your staffing challenges with initiative and efficiency.

Joseph D’Alessandro

About Joseph D’Alessandro

Joseph spent 15 years in leadership positions in hospitality operations before becoming a full-time executive recruiter in 2000. Joseph founded SHS in 2002 and has grown the business from a one-person outfit to a full team of dedicated experts.

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