Summer Tourism Outlook Positive For Restaurants

NRN.com|May 25, 2012 12:06 pm EST

The summer tourism season is beginning, and restaurant operators and analysts see smoother sailing this year than in the last several vacation seasons.

Increased summer restaurant employment projections and improved confidence indexes signal a positive outlook for travel and tourism, which National Restaurant Association research shows produces about 40 percent of restaurant sales.

"We are feeling quite positive on tourism this season," said Larry Majewski, who with wife, Rebecca Majewski, owns the two-year-old Parador restaurant in Egg Harbor, Wis., in the center of the popular Upper Midwest vacation peninsula known as Door County. "Our bellwether is what the innkeepers report, and their bookings are up this year over last. That's our No. 1 indicator of how things are looking rosy."

Door County draws the majority of its visitors from cities within a few hundred miles, including Chicago and Minneapolis, Minn., as well as Milwaukee and Madison, Wis. Their plans are affected by gas prices, which have fallen into the mid-$3-a-gallon range from around $4 a gallon earlier this year.

Easing prices at the gas pump have helped boost consumer confidence. The Thomson Reuters/University of Michigan final index of consumer sentiment on Friday climbed to 79.3 in May from 76.4 in April. The May figure is the highest since October 2007, before the recession began tightening its grip on travel wallets.

A survey in April by the U.S. Travel Association and MMGY Global found the percentage of U.S. adults expecting to take at least one leisure trip between May and October climbed to 65 percent — up three percentage points from April 2011 and eight percentage points from April 2010, when only 58 percent of U.S. adults said they planned to take a leisure trip in the next six months.

The AAA auto club's survey of Memorial Day travel plans, which proves to be an indicator of overall summer travel, found 34.8 million Americans planned to take trips of at least 50 miles on the weekend. That was about 500,000 more than planned to travel for Memorial Day 2011 but about equal to the holiday two years ago, the auto club said. About 30.7 million — or 88 percent — of the travelers this year plan to drive, the AAA said.

That figure provides good news for operators like Cracker Barrel Old Country Store Inc., which has many of its 615 units on major arterials. The Lebanon, Tenn.-based company said earlier this week that customer traffic was up in the third-quarter, as it was in the second.

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Julie Davis, a spokesman for Cracker Barrel, said, "It's fair to say we're looking at a positive summer." Earlier in the year, Cracker Barrel moved some of its annual advertising spend to its fourth, or summer, quarter and will highlight new radio spots to catch motorists as well as other early bird and lunch specials, including a popular new $5.99 baked potato lunch.

To accommodate what they expect to see in increased summer business, restaurants are expected to add 450,000 jobs this summer season, a 4.6 percent increase over the March 2012 employment level, according to NRA projections released Thursday. That will produced the industry's highest summer employment numbers since 1993, the NRA said.

Hudson Riehle, the NRA's senior vice president of the research and knowledge group for the Association, said that level is its "highest on record." Restaurants employ about 13 million people nationwide.

States projected to add the most jobs related to eating and drinking during the 2012 summer season are: New York (43,800); California (32,900); Massachusetts (28,800); Texas (24,600); New Jersey (22,900); Michigan (20,100); Ohio (19,900); and Illinois (19,400).

Eating and drinking establishments added 444,100 jobs during the 2011 summer season, 427,100 jobs during the 2010 summer season, and 391,300 jobs during the 2009 summer season. Only construction produces more summer jobs than the restaurant industry, the NRA said.

Some of those additional jobs go to expanded foodservice programs in areas before untapped. Irving, Texas-based Omni Hotels & Resorts, for example, is expanding its poolside menu offerings to generate more revenue from the summer hot spot. The 24 Omni properties that have pools will have an "Art of the Water" menu for summer, featuring cocktails and ice cream.

David Morgan, Omni's vice president of food and beverage, said in a statement that "by elevating the quintessential summer ingredients — cocktails, ice cream and water — we are able to ensure our guests genuinely enjoy their time by the pool." The hotels are offering regionally inspired cocktails, such as an elderflower champagne Collins in the Northeast and a "skinny" chipotle margarita in Texas.

The menu also features three ice cream sandwiches from the Los Angeles-based food truck company Coolhaus, including a Brown Buttered Candied Bacon Ice Cream with a Chocolate Chip Cookie Ice Cream Sandwich. The menu launches at U.S. locations Memorial Day and will be served through Labor Day, the company said.

Summer tourism customers have expectations of excellent quality food and experience, said Parador's Majewski, whose restaurant has 50 seats plus additional in the bar and patio.

"But it's the local clientele that's just as important," he said. "They are the ones that have word-of-mouth influence. People need to know that something is extraordinary to break out of their patterns."

Majewski, who worked at the Trump Hotel in Chicago before opening Parador in the resort community, added, "There's always the challenge of the finicky nature of seasonality. You always have to be prepared for highs and lows."

Please contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless