Trevor Tkach: Supporting the visitor economy is good local business | Business


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Editor’s note: This article was published in the Record-Eagle’s Economic Outlook 2022 section. For more stories, click here to read the section in its entirety online.



Trevor Tkach

Tkach


It’s no secret that hospitality has deep roots in the Traverse City region’s economy.

Through the decades we have seen the visitor economy evolve from a one-season playground for those who traveled from Chicago and Detroit to the four-season destination of today that attracts travelers from around the world.

As one of the top Michigan vacation destinations, our area continues to evolve and grow. As with any industry, that growth comes with rewards and challenges.

We’re a community that values our local businesses and shared recreational and cultural assets, and that helps attract visitors that value the same. Our strength as a destination helps sustain an ecosystem of creativity and entrepreneurship, giving space for new ideas, artistic endeavors, an expanse of culinary offerings and an ever-growing array of fun things to do.

Coming out of the pandemic, new business starts in Michigan were up 59%. That growth is showcased as you move around our region and see new storefronts, new buildings, and more fantastic repurposing projects underway.

The pandemic may have slowed hotel development in the Traverse City area, but it certainly didn’t curb an appetite for it. With one new hotel soon to open and at least five more in process, hotel room inventory will grow by roughly 700 rooms over the next few years.

Throw in a handful of condo developments and tiny homes that are sure to offer more transient lodging options, plus the 20% annual increase in short-term rental supply, and we’re looking at serious growth.

The average economic impact of tourism in the Traverse City area is well over $1 billion per year.

While adding roughly 1,000 transient units to the county might not seem like much, it has the potential of increasing annual visitor spending by hundreds of millions. Keep in mind, visitor spending is a net export that contributes to the region’s overall economic strength.

Rather than just circulating the same dollars amongst locals, it means new money lands in our region.

Even with the increase in lodging offerings, weekend occupancy rates in July and August will likely remain strong. The risk lies in lower occupancy at other times; midweek lows and off-season dips can make sustainability for lodging businesses challenging.

The added rooms will also further burden an already exhausted workforce. Labor constraints limit economic growth from reaching its full potential, possibly damaging the customer experience and harming the stellar reputation of Traverse City.

Thankfully, our industry isn’t just talking about the threat of limited workforce to our economy, we’re taking action. By rigorously working to address the workforce housing shortage, minimizing barriers for workers to make money, and actively engaging in workforce recruitment, our region is preparing for the years to come.

The nation is experiencing a housing shortage and the Traverse City area is no exception. Noting the housing shortfall, many hoteliers, property managers and related businesses are building and securing housing for both seasonal and year-round employees.

Grand Traverse Resort and Spa has made significant investments to build housing for workers that will meet and potentially exceed their own needs. Cherry Republic is making bold investments in housing for their seasonal workforce. And around the region there are dozens of active housing development projects in process as the market and communities respond to our growing need.

The industry is hard at work to address other workforce hurdles like childcare and transportation, which can lead to underemployment in our region.

Last year, Traverse City Tourism (TCT) became one of the first to take advantage of the Tri-Share Childcare Program, which is a three-way partnership between the parents, employers, and the state to share in the costs of childcare. TCT covers a third of childcare cost for qualifying employees of its member properties.

We will continue to support investments in public transportation and smart commuting options and work with lawmakers to explore more creative solutions to housingand transportation barriers.

During the pandemic, no workforce was hit harder than hospitality and tourism. The Bureau of Labor and Statistic cited roughly 27% of all jobs lost in Michigan during the pandemic were in hospitality and leisure.

This disruption has further exacerbated an already competitive job market. While the industry is working hard on creative recruitment programs, many in the hospitality industry are working with federal programs to secure visa workers to help fill the workforce gap.

There is a common misconception that visa workers take jobs from locals. The reality is that visa workers fill jobs that would otherwise be unfilled. Visa workers bolster the labor force and help local businesses thrive.

Nationally, 4.64 American jobs are supported by one visa worker. TCT and its members have been vigilant in encouraging immigration reform that lifts artificial caps on visa works in our industry, which unnecessarily limit local prosperity and the nation’s GDP.

Tourism and the visitor economy is a critical part of our regional success. We must continue to support the workforce that makes the magic happen. We can’t celebrate these folks enough.

Next time you’re out getting a cup of coffee, enjoying a celebratory meal, browsing at a local shop or maybe partaking in a staycation, keep in mind how much you missed these opportunities during quarantine.

Let’s be kind and grateful for those who are making their livelihoods in hospitality. They truly are essential to keeping Traverse City the vibrant place we call home.

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