In the shallow end of the labor pool
Galveston, other tourism hubs expect busy holiday but can’t find workers
The tables are full, the line wraps around the restaurant, wait times are about an hour long, and Dennis Byrd is short about 125 employees.
Byrd, the owner of The Spot, a beachfront restaurant in Galveston, is trying to staff up for the summer season that starts with Memorial Day, but isn’t having much luck. Restaurants, bars and shops that cater to tourists say business has rebounded at a breakneck pace since the state lifted mask and social distancing restrictions in March, but they can’t find the workers to keep up.
“It’s a much more challenging environment than in 2020,” Byrd said.
After surviving a year of closures, capacity limits, layoffs and bankruptcies, tourism economies across Texas are getting the strong recovery
they hoped for as vaccinations unleash pent-up travelers and consumer demand. But in tourism centers like Galveston, Padre Island and San Antonio, the surge in
tourists is creating new headaches for the businesses that serve them: finding workers.
In South Padre Island, a job fair in mid-April to recruit workers for local hotels and restaurants helped boost staffing ahead of the summer season, but it is still below pre-pandemic levels, said Teresa Rodriguez, marketing and communications manager for South Padre Island Convention and Visitors’ Bureau. Tourism officials warn that visitors might experience longer wait times for service at local restaurants and hotels.
City Sightseeing, a tour bus company in San Antonio, is only operating three of its six buses because it can’t hire enough drivers. The general manager of Menger Hotel in downtown San Antonio is parking cars because he can’t find people to work as valet parkers.
In Galveston, summer crowds are expected to return to pre-pandemic levels after a plunge in visitation that sent hotel and occupancy taxes falling 16 percent last
year, tourism officials said. Some 250,000 people were expected to flock to the island over the long Memorial Day weekend.
Visitors should expect lines and long waits for seats in popular restaurants and bars, tourism officials said. Some restaurants are operating at reduced capacity — not because of COVID-19 restrictions, but because they don’t have the workers to serve a full house.
Mike Dean, who owns four restaurants including Yagas Cafe, increased his $10-an-hour starting wage to $12, but it wasn’t enough to bring people back. He had 225 employees before the pandemic. Now, he’s operating with just 150 workers, forcing him to scale back capacity by 25 percent to serve people in a timely manner.
“We are not going to attempt to maximize profit,” Dean said. “We’re going to do what we can manage so we can give guests the best experience possible.”
For Dean and other business owners, too many customers and not enough employees is a better than the opposite, they said. But it doesn’t make finding workers any less frustrating as businesses look to make the most of a post-COVID surge after a year of struggle.
Some businesses and politicians have blamed supplemental federal unemployment benefits of $300 per week for the labor shortages, but economists, business owners and tourism officials say the issues are more complex. For example, resort areas often depend on seasonal foreign workers, but pandemic-related travel restrictions have dramatically reduced that workforce.
In Texas, visas that allow foreign students to work and study in the United States — a key source of seasonal labor — plummeted to about 3,000 from nearly 14,000 in 2019, according to the State Department. In Galveston, the number of workers on these visas fell to just three from 35 for lifeguards, according to Michael Woody, chief tourism officer for the Galveston Island Convention and Visitors Bureau.
That has helped leave the Galveston Beach Patrol, which relies on seasonal work visas to fill out its summer staff of 125 lifeguards, short about 60 guards, said Peter Davis, chief of the Galveston Island Beach Patrol. Lifeguard towers will be fully staffed on weekends and holidays, including Memorial Day, Davis said, but it will be more challenging to fill each lifeguard tower on weekdays. He encouraged people to only swim in areas that have a lifeguard on duty.
Still not over
Unemployment benefits may play a role in the labor shortage, but that needs to be put in the context of a pandemic that is still not over, Woody said, Higher benefits may give workers concerned about their health the cushion to wait until more people are vaccinated and infections come down further.
“Part of it is how close were earnings compared to unemployment,” Woody said. “Other than that, you know, it’s just a matter of people being comfortable.”
In the meantime, businesses are responding by raising pay. At the Pleasure Pier, a carnival along the waterfront, a giant sign blares “Now Hiring” touting a $250 signing bonus — the first $100 after a month, and $150 after three months. Servers, bartenders, and ride operators, among other positions are needed.
At the Spot restaurant, Byrd is struggling rebuild his workforce to its prepandemic level 235. He is guaranteeing a minimum wage of $10 per hour, including tips, compared to a state minimum wage of $7.25 an hour, and a pathway to an assistant manager
position that pays $19 per hour. He said he plans to boost his minimum to $12 an hour by 2023.
Customers are again flocking to his restaurant, Byrd said, but admitted their return hasn’t been easy. In April, his sales were up 25 percent from prepandemic levels, but staffing is down 45 percent.
“Sales are up, but the labor pool isn’t (big) enough,” Byrd said. “So, the result is self-imposed capacity restrictions. It’s just this very abnormal environment.”
James Clark, the president of Galveston Chapter of the Texas Restaurant Association, said businesses will likely need to do more than offer bonuses and higher wages to attract workers. The Texas Restaurant Association, for example, has issued a statement
urging the state to provide funding and support for childcare. The lack of access to affordable childcare has kept women from reentering the labor force, according to economic studies and surveys.
“As an industry that depends on women and working parents, access to child care is particularly concerning to our members,” the Texas Restaurant Association said in the statement.
The local restaurant association is working with the Chamber of Commerce to tap into other labor pools, such as high schools and colleges. The business groups also are looking into second chance programs to retrain people who were incarcerated as well as working with the disabled.
These populations were employed in the tight labor market of 2019, but lost jobs in droves during the pandemic. They had difficulties finding work as jobs became scarce and employers more selective.
“We’re really trying to look for other ways to go about getting folks to come back to our industry,” Clark said.
Mother of invention
John Mortensen, coowner, Stuttgarden Tavern, made it through a winter of canceled holiday parties and events, including Galveston’s Mardi Gras in February. His monthly sales dove as much as 50 percent.
But business came back with vengeance during spring break in March — “We did more in one weekend of spring break than we did in the whole month of February,” Mortensen said — and he began looking forward to a busy Memorial Day. Until he realized how difficult it was going to be to hire people back.
Mortensen entered the weekend with just 40 employees, two-thirds of staff of 60 that usually works over the long weekend. To recruit workers, he’s asked friends and friends of friends if they need a job. He is hiring teenagers as young as 15. It’s still not enough.
He has closed off tables and asked customers to be patient. He even switched from table service to having customers order from the counter to make the most of his short staff.
“We’re just going to have to get creative,” Mortensen said.