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Danny Meyer says the restaurant industry’s next big challenge is finding talent

·4-min read

The restaurant industry is starting to spring back to life as more Americans get vaccinated and more cities relax indoor dining restrictions.

New York City restaurateur Danny Meyer told Yahoo Finance Live he is hopeful it will be “a really good summer” for the hospitality industry after a long year of COVID-19 pandemic struggles.

“You can feel it on the street. There's hope in the air. People are moving back to [New York] city who had moved away. People are starting to visit the city as tourists again,” said Meyer, whose restaurants include the award-winning Gramercy Tavern and Union Square Cafe. But, according to the founder of Shake Shack and CEO of the Union Square Hospitality Group, there is one big challenge facing the industry — finding talent. 

A disappointing April jobs report showed companies are struggling to entice workers and find the right talent, even with a relatively high unemployment rate of 6.1%. Job openings in March totaled 8.1 million — the highest in more than two decades, according to the U.S. Department of Labor. Job postings rose the most for restaurants, bars, hotels, manufacturing, construction, and retail.

Meyer said he’s seen a “dramatic” shortage of talent for a myriad of reasons. He said some workers in customer-facing jobs like restaurants and retail may not feel comfortable returning until more people are vaccinated against COVID-19.

Meyer’s comments come as indoor dining in New York City expands to 100% capacity May 19, up from its prior 75% level, according to New York Gov. Andrew Cuomo. But even at full capacity, coronavirus precautions set by the Centers for Disease Control and Prevention (CDC) will remain in place, including plexiglass between tables or seating diners at least six feet apart. Meyer said some restaurants may still implement temperature taking for staff and patrons, mask wearing and collecting information from customers to help them with contact tracing.

NEW YORK, NEW YORK - MAY 09: Customer dine at a restaurant's outdoor dining near a
NEW YORK, NEW YORK - MAY 09: Customers dine at a restaurant's outdoor dining near a "Mother's Day" sign on Mother's Day amid the Coronavirus pandemic on May 09, 2021 in New York City. People and families enjoy Mother's Day in anticipation of coronavirus restrictions being lifted on May 19th according to an announcement by New York Governor Andrew Cuomo last week. (Photo by Alexi Rosenfeld/Getty Images)

“The only reason we're able to open to the degree we are right now is that the vaccinations have driven the infection rates dramatically lower and that's made it feel safer. So I think once we get a couple months under our belt, our industry is going to be in much better shape,” said Meyer, who was recently named by New York City Mayor Bill de Blasio chairman of the board of the New York Economic Development Corporation, a nonprofit that promotes economic growth in the city.

Meyer warns that customers should get ready to see lots of new faces at their favorite neighborhood eateries and watering holes after many workers fled the city — or the industry all together — as some restaurants stayed shuttered for months.

“Maybe your favorite maitre d' is no longer working there, or your favorite waiter or waitress or bartender may no longer be working there,” said Meyer. “You might even find that the menus are somewhat shorter.”

Some employers speculate that enhanced unemployment benefits of $300 per week may be dissuading employees from returning to work. The additional benefits are set to expire in September, but at least 18 states are opting out of the federal unemployment benefits program early, including Arizona, Georgia, Iowa, Ohio, South Carolina, Tennessee, Utah, and West Virginia.

“It's almost a little bit like spring training before the regular season,” Meyer said. “It's going to take several months, probably, for restaurants to fully staff up, fully train their new staff, and be the restaurant that you fell in love with in the first place.”

Despite the move to full capacity for indoor dining, de Blasio is leaving outdoor dining in place.

“I think it's going to be permanent, and I'm doing everything I can to advocate for that,” Meyer said. “It’s been great for the restaurant industry, because it's helping to rationalize real estate prices that have gone so far up that it's been impossible to have the kind of margins we need indoors. Adding outdoor dining is icing on the cake.”

Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.