Savannah’s leisure, hospitality industry struggling to hire workers
SAVANNAH, Ga. (WTOC) - There are more job openings in the Savannah area than there have been in a longtime, and it’s having a tremendous impact on the recovery of restaurants and hotels.
Many had to lay off workers during the height of the pandemic. Now the crowds have returned, but workers have not.
Many in the service industry say they are severely understaffed, and the competition is fierce. Some are even offering a hiring bonus.
Georgia Labor Commissioner Mark Butler says unemployment pay is hurting the recovery. But how big of a factor is that? And what are some of the other reasons why workers are not returning?
Last spring, the Hostess City looked unrecognizable. As the azalea blooms withered, the streets emptied. The leisure and hospitality took a big hit. In April of last year, industry in Savannah reported job losses of 46 percent - down by 12,200 jobs, according to figures from the Georgia Department of Labor.
Businesses laid off staff so they could survive. For those lucky enough to keep their jobs, they took on new tasks.
Early this spring, a sign of hope. As the azaleas returned, so did the visitors in spectacular numbers to Savannah in recent weeks.
“It was really busy, there were definitely a lot of crowds,” said Kate Ainsworth, a server at Six Pence. “People seem really excited just to be out.”
The crowds and not enough staff for many restaurants and hotels has made for a painful recovery, many in the industry have said. The workload is unrelenting.
“There are a lot of people around us not just here working 13 days straight, 30 days straight,” said Jana DeVoe-Biggins, director of sales and marketing for Holiday Inn Savannah Historic District.
According to the Department of Labor, the leisure and hospitality industry in Savannah has not made a full recovery. The industry is competing with almost every industry in Savannah that is hiring.
According to Employ Georgia, in the past 60 days, there have been 13,500 job postings - more than any job postings in years, said Georgia Labor Commissioner Butler.
He explained part of the reason why there is so much competition:
“The competition on wages is not just come from other employers, but also unemployment. If you take a look right now, the average individual on unemployment is probably make somewhere around $14 an hour on unemployment or as much as $16 an hour,” Butler said.
The reasons he says many haven’t gone back to work have to do with fear of working in a close contact business during the pandemic. Younger workers only recently being able to get access to the vaccine.
And for some, it’s also has to do with a feeling of financial security with a windfall of cash from tax return money and the federal stimulus checks, several Savannah business managers and owners explained.
Biggins described the mentality:
“I might not need to work and now I can travel. Now I can go and spend time with my family. Now I can pay off some bills and breathe a little bit and enjoy my life. So, the mindset is not thinking forward a lot of times, or they are just trying to live their life. They have been bundled up in this pandemic. they’ve been housed in this pandemic and now the restrictions are off and it’s almost like a form of freedom,” she said.
But there is a silver lining to those who want to work - more competitive wages.
The Holiday Inn Savannah Historic District has raised its minimum wage for entry level jobs to $10 an hour for those with experience and in some cases will pay for relocation expenses.
And out on Tybee Island, the Original Crab Shack is offering a $3,000 hiring bonus for staff who stay through the season. They need more cooks to help fully open the 733 seat sprawling waterfront restaurant.
“I’ve never seen it like this 40 years! Here and many years in Savannah, but I’ve never seen it where you couldn’t hire people. Forget about the bonus, just giving them a job, but they don’t want a job. I guess,” said Capt. Jack Flanigan, the owner of The Original Crab Shack.
Whatever the reason, one thing is apparent, customers are feeling it with longer lines.
And pricey hotel stays.
During an interview this past Saturday, Biggins shared how high the rates were on Friday.
“Last night’s rates were as high as $1,000 dollars a night. $875 $975, $420 here, so it’s a wide variety but based on limited inventory,” she said. She explained what’s driving the demand is some hotels are holding back inventory because they don’t have enough staff.
All businesses say they can do in the meantime is ask customers to be patient and to enjoy the charms of Savannah.
“Their frustration is, ‘Hey, I want to get in my hotel or things are not normal, like your restaurant is closed, your bar is closed.’ But this is Savannah. This is a walking city. you know engaging them to go out. Go out - you just came from being locked down, go out and enjoy yourself in a safe manner.”
Commissioner Butler was in Savannah on Thursday. Butler said they are adding incentives for people on unemployment to go back to work but says ultimately, the federal government needs to start scaling-back pandemic aid.
“We’re doing everything we can to get people back to work. In a lot of cases our hands have been tied by a lot of the policies coming out of Washington. Not just congress, but the U.S. Department of Labor. I know they’re trying to help people but in the end, you’re going to hurt people. Because when we get to September you may end up having fewer jobs, because you’re going to be putting people out of business,’ Butler said.
Americans who qualify for unemployment due to COVID are getting $300 a week from the federal government. Congress approved that last month in President Biden’s $1.9 trillion relief package.
Many in the service industry are concerned about the breaking point for staff who are working right now. And when the relief will come?
The industry is down by about 3,200 jobs compared to February of last year. Savannah’s also seen a startling number of restaurants close during the pandemic.
According to numbers from the city’s Revenue Department, from last April to now Savannah saw a 15 percent drop in Restaurants. That is about one in every seven restaurants.
In 2019, 285 restaurants were issued business tax certificates. It’s an annual application for new and existing restaurants finalized every April.
In 2020, just weeks into the pandemic, that number dropped to 280.
The 2021 numbers have dropped to 240.
That is a net drop of 40 restaurants. But that includes 11 new restaurants.
That means 51 Savannah restaurants have closed in just the past year.
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