March 2006
By Dale J. Venturini
President & CEO, Rhode Island Hospitality and Tourism Association
A new year for Rhode Island’s restaurant industry is well underway, and with a milder than expected winter and a moderate reprieve from high heating prices, restaurants are enjoying a good start to 2006. So far, so good; but if 2005 taught us anything, it’s that we cannot let complacency prevent us from preparing for the issues that are poised to affect the industry in the upcoming year.
To help business owners gain a better idea of the current industry landscape, the Rhode Island Hospitality and Tourism Association is hosting the 3rd annual Economic Outlook Breakfast on April 4th at the Crowne Plaza Hotel in Warwick. This informative seminar will provide a timely update on the economic status of the hospitality industry on both a local and national level, and will offer an in-depth look at current trends and growth opportunities within the industry.
Joining us once again this year to share their insights on the hospitality industry will be Hudson Riehle, Sr. Vice President of Research and Information Services for the National Restaurant Association and a leading source for economic data in the industry; and Rachel Roginsky, Principal and Co-owner of the Pinnacle Advisory Group and Pinnacle Realty Investments. Also joining us will be Adelita Orefice, Director of the Rhode Island Department of Labor and Training, who will answer participants’ questions on new business regulations that affect the hospitality industry, as well as provide an overview of the state’s current market and workforce conditions.
If you are planning on attending this year’s Breakfast, it would be beneficial to become acquainted with the issues that are poised to affect the industry in the upcoming year.
According to the National Restaurant Association’s 2006 Restaurant Industry Forecast, the state of Rhode Island is expected to post restaurant sales of $1.7 billion this year – a 5.3 percent increase over 2005 – which represents 8 percent of New England’s total restaurant sales for 2006. While this sounds promising, it is critical to note other facts and trends to create a successful plan of action.
While sales are up, employment is down. One of the greatest issues facing Rhode Island’s hospitality and tourism industry is a shortage of qualified employees, and we’re not alone. According to the NRA’s forecast, 31 percent of quick-service operators and a sizeable percentage of full-service restaurant operators (42 percent) cite recruiting and retaining employees is their top challenge for 2006.
Part of the problem is the sharp decline in the number of teenage workers. In fact, just 43.7 percent of 16- to 19-year-olds participated in the labor force in 2005 – the lowest level on record. This is alarming news for local Rhode Island’s hospitality businesses as the industry relies on teenage and college-age employees more so than non-seasonal regions of the country. One way to combat this issue is to post positions – and post them early – at high schools and colleges, and check with local schools to see if they are hosting summer job fairs for students.
Another cause for concern is the rate at which Rhode Islander’s disposable income is growing. Higher than expected gas prices, increases in heating costs and high housing costs leave Rhode Islanders with less disposable income to spend on dining out or at area attractions than the rest of the country. Real disposable income is forecasted to advance at a 2.6 percent rate in Rhode Island in 2006, as compared to 2.7 percent in New England and 3.0 percent in the nation as a whole. While that is better than the dismal 1.6 percent gain posted in 2005, it is a clear sign that Rhode Islanders are feeling a pinch in their wallets, which translates into a lower rate of sales for your business.
While the economic horizon is not without its risks, the good news is that the national restaurant industry will likely perform against an economic backdrop that will continue to improve. Two key indicators of restaurant performance are expected to enjoy growth in 2006, which bodes well for continued growth in restaurant sales. These indicators include the Gross Domestic Product, which is projected to increase at a solid 3.7 percent rate in 2006, just above the 3.6 percent gain registered in 2005. The U.S. economy is also projected to add jobs at a 1.9 percent rate in 2006, stronger than the 1.6 percent gain registered last year, and the strongest job growth in six years.
I hope you will join us on April 4th for the Economic Outlook Breakfast. And, as always, if you are in need of additional industry information, the Association is the best source of information.
By Dale J. Venturini
President & CEO, Rhode Island Hospitality and Tourism Association
A new year for Rhode Island’s restaurant industry is well underway, and with a milder than expected winter and a moderate reprieve from high heating prices, restaurants are enjoying a good start to 2006. So far, so good; but if 2005 taught us anything, it’s that we cannot let complacency prevent us from preparing for the issues that are poised to affect the industry in the upcoming year.
To help business owners gain a better idea of the current industry landscape, the Rhode Island Hospitality and Tourism Association is hosting the 3rd annual Economic Outlook Breakfast on April 4th at the Crowne Plaza Hotel in Warwick. This informative seminar will provide a timely update on the economic status of the hospitality industry on both a local and national level, and will offer an in-depth look at current trends and growth opportunities within the industry.
Joining us once again this year to share their insights on the hospitality industry will be Hudson Riehle, Sr. Vice President of Research and Information Services for the National Restaurant Association and a leading source for economic data in the industry; and Rachel Roginsky, Principal and Co-owner of the Pinnacle Advisory Group and Pinnacle Realty Investments. Also joining us will be Adelita Orefice, Director of the Rhode Island Department of Labor and Training, who will answer participants’ questions on new business regulations that affect the hospitality industry, as well as provide an overview of the state’s current market and workforce conditions.
If you are planning on attending this year’s Breakfast, it would be beneficial to become acquainted with the issues that are poised to affect the industry in the upcoming year.
According to the National Restaurant Association’s 2006 Restaurant Industry Forecast, the state of Rhode Island is expected to post restaurant sales of $1.7 billion this year – a 5.3 percent increase over 2005 – which represents 8 percent of New England’s total restaurant sales for 2006. While this sounds promising, it is critical to note other facts and trends to create a successful plan of action.
While sales are up, employment is down. One of the greatest issues facing Rhode Island’s hospitality and tourism industry is a shortage of qualified employees, and we’re not alone. According to the NRA’s forecast, 31 percent of quick-service operators and a sizeable percentage of full-service restaurant operators (42 percent) cite recruiting and retaining employees is their top challenge for 2006.
Part of the problem is the sharp decline in the number of teenage workers. In fact, just 43.7 percent of 16- to 19-year-olds participated in the labor force in 2005 – the lowest level on record. This is alarming news for local Rhode Island’s hospitality businesses as the industry relies on teenage and college-age employees more so than non-seasonal regions of the country. One way to combat this issue is to post positions – and post them early – at high schools and colleges, and check with local schools to see if they are hosting summer job fairs for students.
Another cause for concern is the rate at which Rhode Islander’s disposable income is growing. Higher than expected gas prices, increases in heating costs and high housing costs leave Rhode Islanders with less disposable income to spend on dining out or at area attractions than the rest of the country. Real disposable income is forecasted to advance at a 2.6 percent rate in Rhode Island in 2006, as compared to 2.7 percent in New England and 3.0 percent in the nation as a whole. While that is better than the dismal 1.6 percent gain posted in 2005, it is a clear sign that Rhode Islanders are feeling a pinch in their wallets, which translates into a lower rate of sales for your business.
While the economic horizon is not without its risks, the good news is that the national restaurant industry will likely perform against an economic backdrop that will continue to improve. Two key indicators of restaurant performance are expected to enjoy growth in 2006, which bodes well for continued growth in restaurant sales. These indicators include the Gross Domestic Product, which is projected to increase at a solid 3.7 percent rate in 2006, just above the 3.6 percent gain registered in 2005. The U.S. economy is also projected to add jobs at a 1.9 percent rate in 2006, stronger than the 1.6 percent gain registered last year, and the strongest job growth in six years.
I hope you will join us on April 4th for the Economic Outlook Breakfast. And, as always, if you are in need of additional industry information, the Association is the best source of information.
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