Hospitality industry hanging tough with partial help on the way

Montine McNulty has led the Arkansas Hospitality Association since 1996. The statewide organization represents hotels, restaurants, convention and meeting spaces, and tourism destinations in Arkansas.

For the last decade the tourism and hospitality industry enjoyed unprecedented growth as the state added more attractions and amenities. Employment over the last decade grew by more than 20,000 jobs. Today, employment in the sector stands at 104,200, which is 17,000 fewer jobs than a year ago.

The COVID-19 pandemic has devastated the state’s restaurant, lodging and meeting facilities. McNulty discussed the impact and the industry’s future with Talk Business & Politics Editor-in-Chief Roby Brock.

TB&P: Give me an update on the state of hospitality these days? It’s been a brutal year. Where do you see the industry standing today?

Montine McNulty: The industry today is really at a critical juncture. There has been some improvement in business in recent weeks, but they have not overcome the earlier slowdown from COVID-19. Also, the reduced occupancy continues to be a problem for making a profit, and employee issues are still there.

TB&P: Everyone is visibly aware of the devastation for restaurants from COVID-19. What else is being negatively impacted in your industry?

McNulty: Hotels are in major jeopardy because people are not traveling, they’re not flying. Events aren’t taking place, conventions aren’t taking place, and that’s not going to come back anytime soon. The hotels and the convention businesses in the state are really in trouble and need to be supported. The state spent lots of money building the convention business in this state and we’ve got to protect it and make sure it survives this pandemic.

TB&P: The state has allocated $50 million for hospitality and service businesses. It will come through a business grant program at www.ArkansasReady.com. What would you advise businesses to do or be looking out for in mid-November when these grants become available? What will this mean to the industry?

McNulty: It will help get them over the next few months, hopefully. And it’s going to save some businesses that would just have to fold without any short-term help. They really need that. But for some, it will take them through maybe the hard part. These businesses have got to look at their business models and get their numbers together, number one. I think the announcement of the grant, pretty much laid out the elements the grant would be looking for. Fifty million dollars among a really big industry — and adding some service sector businesses into it — it can be competitive. So they need to do a good job of how they present their information.

I think that this grant recognizes the importance of hospitality and tourism to the economic future of Arkansas. They’re in every community and represent thousands of jobs that need to come back.

TB&P: Let’s look longer term. Consumer confidence is crucial to success and many think we won’t have a complete return to normal until there is a COVID-19 vaccine. Do you foresee businesses hanging on, more business closures? What does the next year hold in store for your members?

McNulty: I think you will see business closures, particularly for those that don’t make some changes in how they’re doing business. We’re really living in a different environment, a different world. They’re going to have to look at this long-term. They can’t think they’re going to wake up and everything will be gone. That’s not the case.

But, we are a creative industry and there are things they can do. We know that serving outdoors really matters. So, long-term, they need to be looking at that, even into next year. Safety and sanitation is what restaurants are all about as well as hotels. We’ve had to live with that for a long time. And they’re really good at that. So, I hope that over time, the customers will feel more confident in trying out restaurants and risk going back.

TB&P: Hospitality businesses have adapted during the pandemic. What do you think will remain in place — from a safety and service perspective — after we get past this coronavirus outbreak?

McNulty: I think to-go orders at restaurants are really important and every restaurant needs to look at how they can facilitate that. The customer doesn’t even have to walk in, they can pick up food and go home. I think people have become accustomed to that and I think they like that. I think that’s here to stay. So, every restaurant needs to perfect their way of serving the customer that way.