Facing an ongoing workforce shortage, more than one-third of Minnesota restaurant and hotels operators project revenue won't return to pre-pandemic levels until next year.
Higher costs and supply chain challenges remain for the state's hospitality businesses, according to a survey by Hospitality Minnesota, the Federal Reserve Bank of Minneapolis and Explore Minnesota that was taken last month.
Even as consumers return to restaurants and hotels, managers are less sure they can accommodate demand because the industry has 32,000 less workers than pre-pandemic levels, Hospitality Minnesota reported.
"I'm hearing the nervousness about finding the workforce to service the demand," said Ben Wogsland, executive vice president for Hospitality Minnesota, representing restaurants, hotels and campgrounds. "That's the number one thing I'm hearing across all hospitality sectors."
One result may be that restaurants continue to operate at reduced hours. Establishments with counter service or that can pivot to a bigger share of takeout have an advantage.
According to the survey, 36% of hospitality operators say their business has returned to, or surpassed, pre-pandemic revenue levels. However, 37% say they won't cross that threshold until next year.
About 19% expect to reach it this year, and 5% said they never expect sales to be as good as they were before the pandemic.
One bright spot is the resort and campground sector, which continued to outperform previous years. Half of operators reported higher winter revenue than 2019 and about the same number expect the positive trend to continue into spring.
