Despite the fact that restaurants and hospitality have been battling labor shortages since before the pandemic, hospitality was not part of the city’s recently announced workforce development program. Photo by Canva

On July 13, the City of Charlotte announced a new round of funding for the Workforce Partner Support Grants program, which supports local workforce development. The city will provide $1.5 million to “increase access to training programs in financial and professional services, technology, manufacturing, transportation and healthcare industries.” The hospitality industry was not included in this funding round.

Grants awarded from the fund will support nonprofits that provide “training programs in education and workforce development to support technical or hard skills development,” with the caveat that training participants must be Charlotte residents 16 or older who have been affected by the pandemic. The program is part of Charlotte’s $60 million in funding from the American Rescue Plan Act, which Congress passed in 2021 to address the ongoing effects of the COVID-19 pandemic. Of that total, $16 million will support workforce development and employment initiatives.

According to the National Restaurant Association, “The restaurant industry, more than any other industry in the nation, has suffered the most significant sales and job losses since the COVID-19 outbreak began.” Restaurants have rebounded to some extent, but challenges remain. 

Labor shortages have hamstrung restaurants’ ability to operate consistently, while supply chain issues and rising prices make it difficult and expensive to obtain staple products, from meat and produce to takeaway containers and napkins. The National Restaurant Association’s 2022 State of the Restaurant Industry report shows that in 2021, 96 percent of restaurant operators experienced supply delays or ingredient shortages.

The same report indicates that wholesale food prices spiked 7.9 percent last year, while hourly labor costs rose 8.6 percent. As of spring, although overall restaurant sales have regained their pre-COVID trajectory, when adjusted for inflation, food service sales were down by 11 percent when compared to March 2020.

Hospitality is among Charlotte’s biggest job sectors, thanks in large part to a growing travel and tourism industry. According to the Charlotte Regional Visitors Authority, that industry grew steadily in the decade prior to the COVID-19 outbreak, “generating $7.8 billion in direct visitor spending, employing 147,000 residents and producing more than $125 million in hospitality tax collections in 2019.”

Despite the severe blow dealt by the pandemic, the industry — including the food and beverage sector — is now outpacing pre-pandemic performance in several metrics. Per the CRVA, “Bars and restaurants in Mecklenburg County saw more than $3.95 billion in gross sales in 2021, $1.15 billion more than 2020 and $150 million more than 2019.” Employment numbers in the broader hospitality industry are also rising: CRVA data shows a 6.1% increase in employment in the sector in 2021 — that’s 124,600 more jobs than in 2020.

Those statistics, while encouraging, belie a complex landscape. The food and beverage industry includes behemoth chains and independent local restaurants, and franchises have accounted for a significant portion of the industry’s recovery. The American Rescue Plan included the Restaurant Revitalization Fund, which distributed $28.6 billion in grants to help bars and restaurants survive, but the fund quickly ran out of money and many were frustrated with its inequitable distribution. Only one-third of the restaurants that qualified for cash assistance from the government received any. 

And despite overall growth in job numbers, restaurant operators still see employment as a significant hurdle to recovery. The National Restaurant Association report found that nearly half of operators “in the full-service, quick-service and fast-casual segments expect recruiting and retaining employees will be their top challenge” this year. Seventy percent of operators, the report continues, “say they don’t have enough staff to support their current service demand.”

Gregg Watkins, a spokesperson for the City of Charlotte, says that for this phase of American Rescue Plan Act funding, “the city focused on the target industries identified through extensive research and outreach efforts as part of HIRE Charlotte, a strategic framework initiative for Charlotte-Mecklenburg.” But he adds that the city has also allocated funding for the CRVA, which may include support for workforce development in the hospitality and food and beverage industries.

Karen Brand, spokesperson for the CRVA, did not elaborate on how the organization would allocate that funding but acknowledged the harm that COVID-19 caused to the one in nine Charlotteans who work in the hospitality and leisure sector. She says, “The action taken by City Manager Marcus Jones and Charlotte City Council through their commitment of $4 million in American Rescue Plan stimulus funding will support Charlotte Regional Visitors Authority programming designed to spur tourism and hospitality industry stabilization.”