Federal workers out of high-wage jobs are causing local restaurants, hotels and other hospitality businesses to report significant profit losses and a scramble to make up the difference.
Business owners and community groups unveiled their challenges to members of the Metropolitan Washington Council of Governments (MWCOG) Wednesday.
The widespread layoffs come as restauranteurs are seeing higher food costs, labor shortages and increase wages for workers, said Shawn Townsend, who leads the Restaurant Association of Metropolitan Washington (RAMW).
“I call it the whiplash that’s happening with the job cuts right now,” Townsend told the council.
“About 50% of our workers are receiving less tips due to other policies and nearly half of D.C. diners are eating out less. It’s just a mounting pressure that’s on our industry right now.”
A recent survey by RAMW also discovered that about 40% of restaurants in the District said that if nothing changes, they will be forced to shutter their businesses this year. An average of 27 jobs are loss every time an eatery closes in the District, he said.
“We put these surveys out a few times a year,” Townsend said. “We like to lean on the data. But in my time in this role, I haven’t seen so much doom and gloom.”
Hotels are feeling the pain, too, as 70% of hospitality dollars are linked to federal spending. Northern Virginia Chamber of Commerce Chairman Mark Carrier told the council it’s a time for innovation.
He said unforeseen partnerships may be the answer.
“We are going to have big change,” he said. “We should lean into all of these advantages and work together collaboratively.”
Carrier also said the region still has an advantage in being an attractive tourist destination.
“We should never forget that we are the nation’s capital,” he said. “That is a tremendous strength that we must build on.”
Alexander Austin, who leads the Prince George’s Chamber of Commerce, is calling for optimism among business owners.
“I like to say the rainbow follows he storm,” he said. “But we have to get through this storm.”
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