PROVIDENCE – As inflation hits its highest rates in decades, the hospitality industry is feeling the impacts of widespread financial strain despite consumers’ increasing comfort with dining out and travel.
That’s true around the nation, according to national data trends, and Rhode Island businesses, said Dale Venturini, president of the Rhode Island Hospitality Association.
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“Restaurants are feeling the same pressures that our customers are,” Venturini said.
Americans’ comfort levels with dining out are at a pandemic-era high, according to statistics tracked by Morning Consult. In the company’s regularly updated poll, 77% of respondents reported that they’re comfortable eating at a restaurant, up 16% from January.
This rebound in consumer comfort also applies to the travel sector, with 74% of respondents comfortable going on vacation and 56% comfortable on domestic flights.
But in May, inflation on goods and services jumped 8.6% year-over-year, marking the largest increase in this statistic since 1981.
As a result, “the money may be coming in, but the expenses have increased so dramatically that the bottom line has reduced considerably,” Venturini said, noting an 18% year-over-year increase in wholesale food prices that was reported in April.
These hikes will continue to drive up menu prices and possibly eliminate some options on menus, Venturini said, while staffing shortages can lead to instances where a restaurant may have enough empty tables to seat customers, but not enough waiters to cover these tables.
Some businesses also fear that, despite increasing consumer comfort with the hospitality industry’s offerings, sales will take a hit due to consumer financial stress.
“One thing we’re watching carefully is, with the rising cost of travel, what decisions are being made to cut back” on expenses, Venturini said. “When you do come to a destination, are you not eating out as much? Are you not spending money on entertainment? We don’t know that yet, but that is something that is being watched.”
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.
