Postseason runs help, but bars, restaurants, hotels still not back to normal in Wis

As Fall begins (in calendar if not in weather), it seems good to check back in Wisconsin's drinking, dining and lodging sectors, to see where we measure up 18 months after COVID started to disrupt the state's economy. If you go into the Department of Revenue’s graphs that show sales taxes in each industry (a good proxy for sales totals), you can see the where Bars, Restaurants (in blue) and Hotels (in green) were decimated when COVID first broke out in March 2020.

You can also see where seasonality kicks in for these industries, and that both of these industries have returned to the same (nominal) level of sales that they had in 2019. In fact, bars and restaurants hit all-time highs in sales taxes in June and July of this year.

One item likely giving a boost to Wisconsin’s numbers in these industries is the Milwaukee Bucks’ run to the NBA Title, which culminated in late July, and featured a lot of scenes like this downtown.

VISIT Milwaukee recently released figures on the economic impact of our crazy Summer of hoops, and said it added $57.6 million of economic activity to the area. VISIT Milwaukee defined that impact accordingly.

The total economic impact figures include estimates of spending at lodging, transportation, food and beverage, retail, recreation, venue rental, and business services companies. The data also include estimates of indirect impact and induced economic impact – the money spent between businesses to support this activity and the money spent by employees of those companies. The entire Championship run generated $1.107 million in total local taxes.

VISIT Milwaukee says hotels were the biggest beneficiaries, due to a bump in occupancy and revenue, as well as the Bucks themselves along with other “recreation” businesses.

But even with the Bucks’ run and the fading of COVID in the first half of Summer, employment in the ;eisure and hospitality industries haven’t come close to recovering the job losses that we saw in 2020.

And with staffing not keeping up with sales, is no coincidence that wages have greatly risen in these industries, as shown by this recent summary from the Milwaukee Business Times.

Wisconsin did see stronger wage growth in the leisure and hospitality sector, which has been among the areas struggling to hire amidst the COVID-19 pandemic. In August, the average hourly leisure and hospitality wage in Wisconsin was $16.63, up $1.74 or 11.7% from August 2020. July saw a 9.8% year-over-year increase and June’s increase was 7.7%. The 9.7% average increase over the summer months ranked 22nd in the country. Many of Wisconsin’s neighboring states saw similar increases, including 10% averages in Iowa and Indiana, 9.9% in Illinois and 9.3% in Michigan. Minnesota was an outlier with a 3.6% average increase

The Wisconsin Policy Forum noted this disparity between sales and employment in food services in a recent report, and also says that data indicates that a lot of bars and restaurants closed in the COVID World and have not been fully replaced.

While no data source is currently available that could show precisely how many restaurants and bars in Wisconsin did not survive the pandemic, limited data from the state’s Department of Agriculture, Trade, and Consumer Protection (DATCP) suggests that hundreds more restaurants closed in Wisconsin than opened in 2020. According to DATCP, 418 state-licensed restaurants and other retail food establishments that serve meals closed in 2020, while 218 opened. In contrast, the same database shows new restaurant openings outpaced closures in 2019 and have again in 2021 through August – another positive indicator of the sector’s recovery.

What we have not seen yet is how the re-emergence of COVID in August and September has affected business and staffing at bars, restaurants and accommodations in the state. And if whether Milwaukee’s service industries are into another big boost in October from another postseason run from a local sports team.

Yep, I was there.