Washington Hospitality Magazine October 2019

WA S H I N GTO N

October 2019

TECH TRENDS THIRD-PARTY DELIVERY IN WASHINGTON STATE: PROS, CONS AND STRATEGIES HOSPITALITY CAREERS NAVIGATOR

TOP TECHNOLOGY GUEST EXPERIENCE TRENDS WHY SMALL BUSINESSES NEED TO DO INFLUENCER MARKETING GHOST KITCHENS

Washington Hospitality Association 510 Plum Street SE Olympia, WA 98501-1587

HOW GOOGLE AND YELP REVIEWS CAN DRASTICALLY IMPROVE YOUR BRAND

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EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Art Director, Lisa Ellefson Contributing Editors: Jacque Coe, Alina Day, Jillian Henze, Morgan Huether, Sheryl Jackson and Nicole Vukonich

Inside

October 2019

EXECUTIVE COMMITTEE Chair: Chad Mackay, Fire & Vine Hospitality Vice Chair: Ron Oh, Holiday Inn Express North Seattle Shoreline EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Haase Chief Financial Officer, Darin Johnson Senior Director of Communications & Technology, Lex Nepomuceno Director of Local Government Affairs, John Lane Director of State Government Affairs, Julia Gorton Director of Membership, Steven Sweeney

510 Plum St. SE Olympia, WA 98501-1587 T 360-956-7279 | F 360-357-9232 wahospitality.org

Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification.

Reproduction of articles appearing in Washington Hospitality Magazine are authorized for personal use only, with credit given to Washington Hospitality Magazine and/or the Washington Hospitality Association.

Articles written by outside authors do not necessarily reflect the views or positions of the Washington Hospitality Association, its Boards of Directors, staff or members.

Products and services advertised in Washington Hospitality Magazine are not necessarily endorsed by the Washington Hospitality Association, and do not necessarily reflect the opinions of the Washington Hospitality Association, its Boards of Directors, staff or members.

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Stephanie Conway

360-956-7279 stephaniec@wahospitality.org Washington Hospitality Magazine is published monthly for members. We welcome your comments and suggestions. email: news@wahospitality.org, phone: 800-225-7166.

Readership: 9,422

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Features 12

Ghost kitchens are coming

14

How Google and Yelp reviews can drastically improve your brand

16

Third-party delivery in Washington state: Pros, cons and strategies

20

Hospitality Careers Navigator

21

Top technology guest experience trends

22

“We’ve been just trying to survive!”

24

5 FAQ’s regarding employee benefits administration (ben admin) software

26

Year-end planning for financial success

In Every Issue 6

From Your President and CEO

8

Lex on Tech

10

Local GA Update

11

State GA Update

28

Calendar and New Members

30

Ask the Expert

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MEDICAL

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President and CEO We don’t do this very often, but this really is important. I really am urging the industry to find someone who is a tech guru, their fixer. Someone you can call to help you invest in the right tech for your business. Please forgive the reprint from last year. We’re not doing it out of laziness, but because it’s a key to moving forward. This column first ran in our July 2018 magazine.

In May, I proclaimed 2018 the Age of Disrupters in my State of the Industry talk.

Definition of a Disrupter: a: to be the cause of disorder or turmoil; b: to be the destroyer, usually temporarily, of the normal continuance or unity; c: to be the cause of radical change.

There are so many disrupters in hospitality right now – from scheduling, to millennials, to thirdparty delivery and the onslaught of new technology. Undoubtedly, this month you have been dealing with at least one disrupter in your business.

Anthony Anton President and CEO anthonya@wahospitality.org

Any economic cycle tends to have two to four disrupters. What makes this business climate unique is the volume of disrupters.

The association is currently tracking more than 30 disrupters in hospitality in this economic cycle.

One of the reasons tech is challenging is because it isn’t what we do. Most of us got into hospitality either because we love people or we love the culinary arts. It’s the nature of our industry. None of us entered the industry seeking to get and use the best in tech. So how do we deal with something so out of our natural skill set?

This is where we look to the largest businesses in our industry that have resources to develop solutions the rest of us can learn from.

What do we see so far?

The largest companies are hiring experts. They aren’t 1990 IT nerds who would come by our desks to fix a printer, but truly strategic leaders who can develop and/or adopt tech innovations that can deliver us to the other side of this storm of disrupters.

Nearly 100 percent of the top hospitality companies by size now have a chief tech officer or equivalent. Many employ more tech professionals than either tourism marketing organizations or menu developers.

For example: Domino’s Pizza’s CEO Patrick Doyle told Harvard Business Review about the importance of technology when he said, “We are as much a tech company as we are a pizza company.” He also pointed out that of the 800 people working at Domino’s headquarters, 400 people work in software and analytics.

As your company’s leader, you don’t have to understand the differences between Snapchat and Twitter, know how to fix your Wi-Fi or know how to create an e-dashboard for your business. But you do need to identify someone who does.

We understand most hospitality companies are too small to hire on full-time expertise to pave the way for modern success. So maybe the solution for our problem today is to look to our past.

When we needed bridges to technical solutions in the past, we all had a fixer. We all had a hood fixer, a cash register fixer or a refrigeration fixer.

On Sundays, my dad was constantly headed down to our family business to meet the latest parade of fixers with skills to solve an issue he couldn’t fix.

Maybe the time has come that we all need a tech fixer. Or maybe that is too broad; maybe we need a handful of them: a social media guru, a programmer, a dashboard creator, a data manager, etc.

The point is that someone needs to be delegated to prepare and adopt the changes your company needs for the technology disrupter. And as your company’s leader, or at least as one of them, you are the one who must execute that delegation.

We would love to learn how we, as your primary source of information, can help. Tell the association what it can do to help you navigate the disrupter of tech.

We’re looking forward to helping you get to the other side.

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WHY SMALL BUSINESSES NEED TO DO INFLUENCER MARKETING

By Lex Nepomuceno Influencer marketing is a necessity in business in our culture. The tool is a fastgrowing method for gaining customers, with nearly half of marketers using a designated budget specifically for influencers.

Most people have memories of commercials during their television shows or full-page photo ads in their magazines with celebrities posing with or endorsing a product. They were the original influencers, paid richly for their endorsements. Today’s culture is much more discerning and places great value on authenticity, which includes the places they eat and stay.

Using micro-influencers for your restaurant or hotel Those who have anywhere from 3,000-10,000 followers on their social media accounts can be considered microinfluencers. They typically have a niche and have insight into their audience, making them a relevant voice to speak and promote products and services.

Most influencers have a niche audience, which makes it perfect for partnering with a small business that has a specific target market. In partnering with influencers, hospitality businesses can utilize the audience of their influencers to gain visibility and new clients.1 The influencers that businesses partner with are those who have already eaten at their restaurant or stayed at their hotel. This personal experience with the business’ property makes the influencers’ recommendation authentic, which is something that consumers deeply value.2 Does the size of the company matter in influencer marketing?

1.

2.

3.

4.

When it comes to influencer marketing, the main thing that is affected by business size is the type of influencers companies can partner with.

It is unusual for a smaller business to land a partnership with a huge influencer, and instead, they tend to work with micro-influencers. While on the surface, they may appear to be a disadvantage; on the contrary, it is a positive aspect.

Insights and data show that the smaller micro-influencers tend to have a higher engagement rate, while the enormous accounts have a much lower rate.3 This means that smaller businesses will be promoted better, more often, and in a more genuine manner, with positive audience response.

Micro-influencers also charge less for the partnership than the mega-influencers, which means better budgeting and, because of the higher engagement rate, a better return on their investment.

Influencer marketing can be crucial to small business success.4 With all of the marketing tools out there these days, small businesses must get on board and utilize a variety of the most popular, budget-friendly tactics. There is no need to purchase air time for commercials or invest in spendy, confusing print ad campaigns. Most marketing is done online, through social media, and a variety of word-of-mouth platforms.

Influencer marketing is just one of these tools, but one of the most important. Budget-friendly and easy to navigate, influencer marketing can be one of the keys to a restaurant’s or hotel’s success. 

“Restaurant Social Media Influencers (Izea.com); https://wha.fyi/1019mag1 “Can influencers and authenticity ever be compatible?” (QZ.com); https://wha.fyi/1019mag2 “Micro-Influencers: The Marketing Force Of The Future?” (Forbes); https://wha.fyi/1019mag3 “Is Influencer Marketing Actually Effective?” (MediaKix); https://wha.fyi/1019mag7

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October 2019 │ 9

Government Affairs | Local GA Update

By Jacque Coe, APR

Seattle passes Hotel Worker Legislation with unanimous vote The Seattle City Council unanimously on Sept. 16 passed a sweeping legislative package aimed at workplace protections for hotel employees. The legislation was brought after a court invalidated Initiative 124, passed by Seattle voters in 2016 to provide health and safety protections for hotel housekeepers.

The four parts of the legislation address job retention, safety, workload restrictions and health care. A significant change from I-124 are requirements for hotels related to room cleaning workloads for housekeeping staff and health care requirements. The new law limits the maximum floor space employees may clean to 4,500 square feet in an eight-hour workday. Any room cleaning over 4,500-square feet must be paid at three times the normal pay rate.

New health care language sets specific monthly health care expenditures employers must pay for covered employees, ranging from $420 monthly for an individual, to $1,260 monthly for an individual employee with a spouse or domestic partner and one or more dependents. Other parts of the legislation include job retention requirements, panic buttons for employees cleaning or delivering items to guest rooms and informing guests of policies against violent or harassing conduct by guests.

The legislation also applies some business requirements to ancillary hotel businesses depending upon the size of the ancillary business. Language defines an ancillary business as those that routinely contract with the hotel for services in conjunction with the hotel’s purpose; leases or sublets space at the site of the hotel for services in conjunction with the hotel’s purpose; or provides food and beverages, to hotel guests and to the public, with an entrance within the hotel premises. A “hotel’s purpose” means services in conjunction with the hotel’s provision of short-term lodging including food or beverage services, recreational services, conference rooms, convention services, laundry services and parking. Hotels will provide panic buttons to all ancillary businesses, and ancillary businesses with 50 employees or more worldwide will be subject to job retention and health care requirements.

For weeks hoteliers and small businesses—many of them restaurateurs--provided testimony and letters of concern, offered tours of impacted businesses and attended feedback sessions with council members.

Rulemaking is expected to further refine the definition of ancillary hotel businesses as well as other aspects. Most provisions of the law take effect in July 2020, while some aspects relating to ancillary businesses with less than 250 employees would not take effect until 2025.  10 │ wahospitality.org

By land or by sea; Seattle’s new Commuter Benefits Ordinance takes effect in 2020 Seattle’s new Commuter Benefits Ordinance will take effect on Jan. 1, 2020, requiring businesses with 20 or more employees to offer monthly pre-tax payroll deductions for transit or vanpool expenses. It’s part of a citywide movement to get people out of their cars and into mass transit to reduce traffic congestion and carbon emissions. Employers may also provide subsidized transit passes to meet the requirements of the law.

Compliance with the law is straight-forward. Employers either set up a system for monthly pre-tax payroll deductions or provide subsidized transit passes. Because the deduction is pre-tax, the law has the added benefit of lowering the tax bills for both workers and businesses. Rulemaking will occur in late October to determine what level of subsidy meets the requirements of the law.

Final rules and current resources can be found on the city website for the Office of Labor Standards at https://www. seattle.gov/laborstandards/ordinances/commuter-benefits.

The Seattle Office of Labor Standards will begin enforcement of the program on Jan. 1, 2021.  Gig Harbor is latest to move away from single-use plastic bags, straws and utensils Following the lead of Seattle and other cities, Gig Harbor is the latest city to implement a ban on single-use plastic bags, straws and utensils. The plastic bag ban applies to grocery stores, restaurants, department stores, hardware stores, pharmacies and liquor stores. The plastic bag ordinance was approved by the city council in December of last year, and went into effect over the summer. Plastic bags will still be available for bulk foods and produce at grocery stores. The ban is intended to encourage shoppers to bring their own bags to use and reuse. Plastic utensils, straws and containers were also banned; that ordinance goes into effect in late November and applies to food service providers for items ranging from plastic clamshells and vegetable trays to EPS Styrofoam and single-use cocktail picks. 

Government Affairs | State GA Update

By Nicole Vukonich Statewide minimum wage increases to $13.50 on Jan. 1, 2020 In 2016, Washington state voters passed Initiative 1433, which is significant because the final phase-in of the statewide minimum wage will be implemented on Jan. 1, 2020. In all areas that do not have a local minimum wage, the statewide minimum wage will increase by $1.50 to $13.50 per hour. This is the final phase-in of a four-year proposal that saw the minimum wage increase from $9.47 in 2016 to now $13.50 in 2020. The statewide minimum wage will be increased for inflation beginning in 2021. 

Interested in resources to help you through this transition?

See page 22 for information about the HUB.

Government Affairs Committee Regional Meetings in October and November Continuing its tour across the state, the State Government Affairs team will be coming to a region near you to give you an opportunity to speak with your lawmakers about topics important to the industry like restrictive scheduling and the costs of doing business. RSVP to Katie Doyle, grassroots manager at katied@wahospitality.org.

Tacoma – 9-11 a.m., Oct. 08, Narrows Plaza Bowl, 2200 Mildred St. W, University Place Vancouver – 10 a.m.-noon, Oct. 10, Hampton Inn & Suites, 315 SE Olympia Dr., Vancouver Seattle – 10 a.m.-noon, Oct. 15, Ray’s Boathouse, 6049 Seaview Ave. NW, Seattle Edmonds – 10 a.m.-noon, Oct. 22, Salt and Iron, 321 Main St., Edmonds Bellevue – 9-11 a.m., Nov. 5, The Westin Bellevue, 600 Bellevue Way NE, Bellevue 

Reminder: CBD cannot be used as a food ingredient The state Department of Agriculture is reaching out to the industry to remind operators that the use of CBD in cooking and CBD-infused food is not legal and urges operators and locations to remove these products. The U.S. Food and Drug Administration has not approved CBD as a food ingredient. Additionally, CBD cannot be used as a food ingredient under a Washington State Food Processor License or distributed in the state under a Washington State Food Storage Warehouse License. For more information, visit the FDA’s common questions website: https://bit.ly/2Wu37SU.  Paid Family and Medical Leave benefits begin Jan. 1, 2020 Beginning Jan. 1, 2020, employees will be able to use up to 12 weeks, capped at a total of 16 weeks per 12-month period, of Paid Family and Medical Leave for qualifying life events. This includes the birth or placement of a new child, a serious illness of a family member, a personal and serious medical issue or disability, recovery of childbirth or pregnancy complications and military exigency. All employers must notify employees of the program and their rights. For more information, please visit the Paid Family and Medical Leave toolkit on wahospitality.org. 

Registration now open for Hill Climb 2020 Are you ready to tell your unique story, build relationships with key decision-makers and network with hospitality owners and operators? Hill Climb 2020 is Jan. 27 and registration is now open. Visit hospitalityhillclimb.org to reserve your free spot today. Hill Climb and Taste Our Best are the association’s largest grassroots events of the year and you won’t want to miss out.  October 2019 │ 11

Ghost Kitchens Are Coming Should anyone be afraid?

By Alec Northrop, Contributing Writer The Iron Horse restaurant opened in Pioneer Square in 1971 and operated without traditional wait staff for 29 years before closing its doors, citing rising rents in Seattle. It was way ahead of its time.

The Iron Horse famously brought food to your table on a train. It was an impractical, but fun method of food delivery for a different era. Now a new generation of restaurateurs are turning to the practicality of ghost kitchens, and in a nation where people have less time to do things like eat, people don’t care how fun they are.

What does a ghost kitchen look like?

The concept of a ghost kitchen is simple: One kitchen prepares food to sell under different brand names. However, the iterations of this simple concept are endless.

Some ghost kitchens sell different styles of food but operate under the same owner while others charge established restaurants to use their space.

Some kitchens have limited seating inside for dine-in customers, while others only deliver. While there are many variations of a ghost kitchen, getting the food from the kitchen to your home is the most important piece 12 │ wahospitality.org

of the puzzle, and the ghost kitchen capitalizes on the shift to third-party delivery by giving businesses the ability to be flexible with their image.

Many ghost kitchens stay true to their name, creating a brand that matches the food they deliver while keeping their operations out of the public eye. However, one of the largest players, Kitchen United, lets customers know exactly what is going on. Kitchen United, backed by investment money from Google, has a location in LA with one kitchen and 10 restaurants.

Essentially an upscale food court that shares a kitchen, customers can dine-in where they order food on touch screen kiosks and clean up after themselves. The company only has to employ its chefs and delivery drivers who can be employed by a number of third parties.

Trending positively: The climate creating the conditions for a ghost kitchen It’s well known that third-party delivery is on the rise. The National Restaurant Association recently released a report that found that 50% of millennials are more likely to have restaurant food delivered to them than

more people willfully order a $25 meal to be delivered to their home. While it seems counterintuitive, ghost kitchens offer a way for talented chefs to enter the market without having to worry about the logistics of everything that comes with operating a traditional restaurant.

two years ago, while the majority of millennials and adult women say they are too busy commuting to and from work to do things like go to a restaurant.

These trends have led to an explosion in third-party delivery and added viability to the ghost kitchen concept. After all, the ghost kitchen has been tried before and it has failed. Two of the largest issues facing the industry were brand recognition and the additional hurdle of delivery operations. Previous ghost kitchens like Sprig and SpoonRocket offered niche cuisine and guaranteed delivery times, but marketing proved difficult without a storefront and perfecting delivery is no small feat. Both of those problems are solved with third party delivery; people find you on their Uber Eats app, and then Uber delivers the food. The restaurateur has nothing to focus on besides making delicious food.

“I think they (third-party delivery services) will continue to grow, however I also see some of the larger providers take over the market and we may see three or four large players in the market and the rest will either close or go out of business, since it is so costly to maintain this type of delivery service, unless you have a large delivery infrastructure such as Uber or Amazon,” said Taylor Hoang, owner of Pho Cyclo. “The bad news for restaurateurs is they have less option to choose which party to participate with and the already high fees may go up as a result.”

One of the reasons ghost kitchens are becoming successful is that we are in the midst of a shift in culinary culture.

Food critics have increasingly based their reviews on the atmosphere in a restaurant to the point that the taste of a meal seems to be the least important factor in a restaurant’s quest for a Michelin star. The trend is beginning to shift as

What can this look like in Washington?

In places like Seattle, where labor costs and rent are increasing simultaneously, ghost kitchens could be a savior. Picture a popular, established cafe that has recently started losing money when razor-thin margins were cut further by rises in rent, food costs and minimum wage. That restaurant can do very little to flip a switch and become profitable. As a longstanding staple of the community, they can’t market their way out of the hole and increase their brand awareness, and they can’t cut costs any further than they already have.

Ghost kitchens give them a wealth of additional options. The restaurant could rent out its kitchen at night to a local catering company for meal prep.

Some restaurants may have thought third-party delivery could be their saving grace, only to find that the vendor fees or increased kitchen traffic didn’t fit with their model. The additional benefit of having a ghost kitchen is that you can start fresh and offer your food at whatever price you’d like.

Logistically, it adds very little to the model of third-party delivery: The kitchen makes the food, and a driver comes to pick it up. The way the ghost kitchen concept differs is in its online presence. The driver will have to come to your store, but the trick is that the customer doesn’t associate the food with the kitchen it was made in, they only know what they’ve seen on their app and on your website.

Ghost kitchens are a great way to utilize retail space in commercial spaces that have been vacant. Multiple restaurants with different owners can cost-share by using the same kitchens. Seattle businesses have been a pioneer in this area as downtown businesses have been renting their kitchens out to catering companies and the likes for years.

Once you get past the idea of having one address per brand, you open your business up to a new group of consumers.

In short, ghost kitchens are exciting because they are bringing new possibilities to an industry that rarely sees drastic operational change. Ghost kitchens may prove to be the most important development the industry has seen in decades and we’ll be keeping our eye on them. Savvy restaurant owners should do the same.  October 2019 │ 13

How Google and Yelp Reviews Can Drastically Improve Your Brand

By Lex Nepomuceno

Consumers are inherently wired to make purchasing decisions based on the recommendations of others. For example, people are more likely to patronize a restaurant or hotel that has been reviewed and recommended by countless other customers, over a competitor who has much fewer or no online reviews whatsoever (even if both businesses offer the same products/services at roughly the same price point). Simply, more reviews = more consumer trust = more conversions.

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Here's how you can start building your online review strategy with Google and Yelp reviews.

Google reviews Google reviews is a feature that is integrated within Google Maps and Google My Business. While there are dedicated review sites out that are older, Google- being the go-to search site for most people- is also fast becoming a goto review site for a LOT of consumers. According to a 2018 report by ReviewTrackers, more than 60 percent of consumers reported that they are more likely to check on Google reviews first before checking other review sites.

To get started on Google reviews:

1.

Claim and create your profile on Google My Business

Having a Google My Business profile allows you to manage your business information across Google's services, like Maps and Search. It's like your public calling card on Google. With it, you'll be able to respond to customermade reviews, and increase your chances of showing up on Google searches. My Business also has a nifty feature that pulls up other reviews from sites like Yelp, Facebook and other relevant websites.

2.

Fill your profile with important data

There's practically no use having a Google My Business profile if you don't fill it out completely. As a rule of thumb, whatever Google asks of you, provide it. This might mean on-site images, pictures of products, website URL, your business's social media channels and opening/closing times.

3.

Encourage your customers to review your page on Google

Seventy-five percent of the world's phone users use Android, and anyone who uses Android as a mobile Operating System is guaranteed to have a Google account. This means that people won't have to sign up for anything just to leave a review on your business page. As long as they have a Google account, then they're good to go. Encourage them to leave reviews as much as possible. Should they need help, guide them to your My Business profile page directly while they're still inside your store.

What about yelp reviews?

Yelp reviews, while conceptually similar, is basically a whole different animal from Google reviews. It's important to note that Yelp has been around for much longer than Google reviews, and as such, has an air of exclusivity that surrounds it. While Google allows basically anyone to write reviews, Yelp is exclusive only to users who signed up for it.

Even then, their reviews would have to pass several metrics for it to be posted on the site. Yelp takes into account the quality of the user's past reviews, their account age, as well as the total numbers of reviews that they've successfully posted on the site.

Because of this, there are a lot of people out there who put more weight on Yelp reviews over reviews from other sites. It's still best not to ignore Yelp and other major review websites in your online marketing strategies.

A few more tips regarding online reviews

1.

Always remind your customers to leave reviews.

Emphasize how easy it is to post reviews on your business pages, through their mobile devices or desktop PCs.

2.

Reply to your customers' reviews, regardless of whether they are positive or negative. This is a good way to show that you value your customers' input and, if the review is a negative one, that you are constantly looking for ways to improve your business and products. In the case of Yelp, particularly responsive business owners are highlighted, and those with fast response rates are often seen in a better light over non-responsive ones.

3.

Verify your business, and always make sure that the posted data is correct. Once verified, your business is eligible to appear on Maps.  October 2019 │ 15

Third-party delivery in Washington state: Pros, cons and strategies

By Alec Northrop, Contributing Writer

Third-party delivery is on the rise, and things certainly aren’t any different here in Washington. In an era where people are going out less to purchase everything from cat food to furniture, it was only a matter of time before the restaurant industry caught on, and this sudden expansion has business owners wondering if third-party delivery is the right choice for them.

Washington state seems uniquely poised for a third-party delivery revolution. In addition to the vibrant tech scene and high percentage of millennial residents, many people (particularly along the I-5 corridor) find themselves wondering why they would deal with traffic when they can pay someone else to do it for them.

“We have been using the third-party delivery service for more than 10 years at our various locations,” said Taylor Hoang, owner of Pho Cyclo. “I do it for marketing purposes and to ensure our name is out there with the various delivery service avenues.

As the consumer dining behavior changes, they are utilizing more delivery dining options. Thus, it was important to get our brand in front of these consumers. Our sales volume has had a slight increase, but not much.”

Where do I start?

For restaurateurs in Washington, choosing the right delivery service can be more difficult than in other regions, but that’s a good thing, a symptom of having too many choices. The field is so crowded that when Amazon Restaurants shut down this year, consumers barely noticed.

So how do you choose the best platform for your business?

Some services, like Bellingham’s Viking Food, have been

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a community staple for close to a decade, and offer a flat fee structure while maintaining high levels of customer trust. Most of the national players, however, keep their fee structures close to the vest. Here is a quick guide to the national third-party delivery services with fee estimates as reported by vendors as well as key differences between the platforms. Choosing the best option for your business will require looking beyond these guidelines at the options available in your area.

Doordash - We start with Doordash, which is becoming the obvious choice for a lot of restaurants and diners alike. The platform is trending positively and DoorDash has seen its market share of the third-party delivery revenue grow from 15% to 27.6%, nationally.

Doordash has a very user-friendly app and has the highest customer satisfaction rating of any major third-party delivery service. To boot, Doordash’s estimated vendor fee is 20%, which is the lowest of the major services.

Caviar - Caviar works hard to distinguish itself from the other third-party delivery services, and it seems to be succeeding.

Available to customers in the Seattle metropolitan area (one of only 13 metro areas in the United States), Caviar won’t deliver a Dick’s burger to your door. Rather, they boast restaurants like 13 Coins, and advertise exclusive restaurants like Oddfellows, Japonessa, and other highrated, trendy joints in Seattle and Bellevue that only deliver through Caviar. The result is an average ticket price

significantly higher than other services, and a clientele with a higher average income. With reported fees of 25-30% Caviar might be the way to go if you want to get in on the thirdparty delivery craze without tarnishing the reputation of your upscale or niche restaurant.

use the service primarily for grocery delivery might scroll through the other services available and see your restaurant.

Postmates is an interesting option for food service, but restaurants report paying about 30% for vendor fees - a little steep considering the drawbacks.

Grubhub - Once the undisputed leader of third-party delivery, Grubhub has seen a slight decline in market share over the past few years. However, it has been able to maintain huge numbers of users by acquiring other companies like Seamless. Apart from being the most established app, Grubhub also offers POS integration that goes far beyond the capabilities of the other services. Orders from Grubhub’s website or app can appear in your queue of orders in the same way they would if your waitstaff had entered it in at a POS device. Grubhub’s fees reportedly range from as little as 15% to 30% because of its range of services and subsidiaries.

Uber Eats should definitely be considered as it is the largest player in the Seattle Metropolitan area, but it does little to beat DoorDash on paper, and it charges more (reportedly between 30% and 40% vendor fee) for its services. That being said, they rank as one of the fastest delivery services on average. One negative aspect to consider is that its brand has already been established. Even for those who have no issues with a taxi driver delivering their food, you can never be sure that the customer won’t be thinking about that awful ride they once had with an Uber driver when they order and consume your food.

Postmates is an interesting option because of its versatility, but that can also be viewed as its downside. While other platforms deliver food from restaurants exclusively, Postmates aims to deliver groceries, alcohol and more. On one hand, it hurts the relationship between the restaurant and the delivery service because their business model is not built to coexist exclusively with yours. However, this can also be a way to reach new customers. In areas like Los Angeles, Postmates has a larger market share than the other services mentioned, and many of those loyal app users who

So how does the gig economy differ in a business environment like Washington’s? What role does the nation’s highest minimum wage play on third-party delivery?

Third-party delivery costs in Washington state

Washington state’s higher minimum wage gives a pay boost to employees of a traditional in-house delivery unit like Domino’s Pizza, in comparison with the likes of Uber Eats, and that comes at the cost of the employer. As noted in The Seattle Times, drivers for Grubhub earn a national average of $13.85 per hour, while Domino’s drivers make $13.40 per hour and Panera in-house delivery drivers make $13.68 per hour. In Washington, third-party delivery drivers who are independent contractors make similar figures, while in-house delivery drivers make much more-upwards of $25 an hour after tips. This keeps delivery drivers from quitting their jobs with stable hours and flocking to third-party gigs. This also

October 2019 │ 17

adds an extra benefit for restaurants that want to cut down on labor costs. Some local restaurants are working out deals with delivery services to essentially have a driver on call. So if your business is open for lunch, but typically only gets a handful of orders, why risk paying two drivers at $15 an hour for three hours during lunch? Instead, the business can call on a DoorDash or Grubhub driver to show up for one order and take the obligatory vendor fee without any need for additional compensation from the restaurant. For orders that come directly from a third-party app like DoorDash or Uber Eats, the benefits continue. The Washington State Department of Revenue guidelines generally lay the collection of sales tax on the marketplace facilitator (the app) while the marketplace seller is usually not required to collect and remit retail sales tax on these sales, as this is handled by the marketplace facilitator. The delivery service is responsible for collecting and remitting retail sales tax on behalf of the restaurant, leaving hours per order at nothing more than the time it took to make the food.

Branding - The pros and cons of a uniformed employee

Other sectors of the hospitality industry have seen their brands splinter in this way before.

Nineteen years after Hotwire.com started offering its services, the vast majority of people looking for a hotel use a third-party service to book their room. The difference for the restaurant industry is the amount of face-to-face contact you have with the third-party. Most services have few guarantees for quality control. On one hand that seems like a negative: How can you assure that your food will be delivered in a timely

18 │ wahospitality.org

manner? On the other hand, many consumers will blame their driver and the app before they blame the restaurant, and with the ability to track the person who has your food, it can be hard to make excuses. If you are already struggling to fulfill orders in a timely manner, third-party delivery can actually be a tool you use to bring down wait times (or at least shift some of the blame away from your business).

Takeaways

Einstein once said that given one hour to save the world, he would spend 55 minutes defining the problem and then five minutes solving it. Defining the issue at hand is especially important for Washington restaurants looking at third-party delivery because there is a wealth of options. First and foremost, you should decide whether or not you have the resources and infrastructure to build your own app or website. If not, you should next ask yourself if you can hire your own drivers and use a third-party app such as Olo. If the answer to both of those questions is “no” and you will be going with a delivery service like the ones we’ve outlined, ask yourself about your target market: Will you be appealing to the high-end foodies on Caviar, or is UberEats’ fast delivery time and ease-of-access the most important feature for your business? Last, take a look at your margins and figure out what you can afford to pay for a vendor fee. Take a look at competitors in your area; are they charging $5.99 delivery fees? Is the field wide-open for the taking? Remember that these services negotiate fees on a case-by-case basis, and come to the table armed with your price limits. 

GOLF FORE EDUCATION

PRESENTING SPONSOR

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October 2019 │ 19

HOSPITALITY

CAREERS

NAVIGAT R Show your employees the many pathways they can take to a long-term hospitality career.

What is the Hospitality Careers Navigator?

The navigator allows users to explore hospitality careers and answers these questions:

How can I get to my dream job?

What skills or training do I need to get there?

Are there other positions I can take to get to that same job?

It gives you the tools to show your employees a future in hospitality is possible and a path to achieving it.

Getting started

1 — Go to whaef.org/career 2 — Use the Hospitality Careers Navigator to explore hospitality careers 3 — What skills or training do your employees need?

4 — How can you help your employees reach the next stage of their career?

Help your employees achieve the career of their dreams in hospitality.

OWNER HOTEL GENERAL MANAGER RESTAURANT MANAGER EXECUTIVE CHEF FINANCIAL CONTROLLER DIRECTOR OF REVENUE

WHAEF.ORG/CAREER 20 │ wahospitality.org

Top Technology Guest Experience Trends Foodservice Source: National Restaurant Association’s “2019 State of the Restaurant Industry”

Percent of adults who say the availability makes them more likely to choose one restaurant over another.

61%

50%

Ability to view menu online beforehand

Ability to read online reviews beforehand

41%

Online Ordering is Available

26%

22%

16%

Offer tableside electronic ordering and payment options

Offer a smartphone app

Offer the option of selfservice kiosk ordering

Lodging Source: AHLA’s “2018 Lodging Survey – Hotel Trends”

Universally across all chain scale segments, but independents:

80%

66%

88%

Guests using their mobile device to check-in

80% 35% 2%

Use of Central Reservation System

40%

Website bookings

3rd party internet sourced bookings

Guests using mobile apps to access hotel services

Midprice or higher end

18%

Economy

Budget

Hotels using mobile devices as room keys October 2019 │ 21

“We’ve been just trying to survive!

”

An investigation into January’s coming $1.50 per hour wage increase, the projected impact on your business and how we’ll help

By Jillian Henze, APR

In March 2019, the alarm sounded.

The alarm’s name is Cathy Fox, the association’s Seattle Neighborhoods senior territory manager, and a veteran staff member at the association. Members love Cathy with her abundant, frothy blonde curls and a shoot-from-the-hip personality.

“No one knows the state minimum wage is going up,” Cathy gravely announced.

Surely some of the members know, I thought.

An association-wide meeting was called in June and the department heads sat around our oblong conference table in the Olympia office to figure out what the alarm was all about.

Cathy and the Membership Team, our boots-on-the-ground territory managers, reported an increase in requests for member payment plans and the shocking feedback that our members did not know the statewide minimum wage was rising $1.50 per hour in January and did not have plans to mitigate costs. The scene was a flurry of evidence being passed back and forth across the table and staffers scribbling retention rates on the white boards.

We all left that meeting on the same page – we had to better understand the severity of the situation and we had to take a proactive approach to help members balance costs.

22 │ wahospitality.org

Digging for data My gut told me there was something we could do to help.

A former investigative journalist and newspaper editor, I went digging for data, first-person accounts and anything that would better help the association understand what was in front of us. Here’s what I found.

The statewide minimum wage increase of $1.50 had happened recently – it went up from $9.47 to $11 per hour on Jan. 1, 2017, after Washington voters approved Initiative 1433, the minimum wage law that would phase in increases through 2020.

“The 2017 minimum wage increase was to market,” association President and CEO Anthony Anton said. “For the majority of Washington markets in 2017, the tight labor market dictated that employers were already paying above $11.”

After that increase in 2017, the association felt tremors of the impact. Two hundred and ninety members dropped that year.

The number of members who went out of business, closed and sold increased. This was a marked difference from 2018.

Dropped member numbers decreased by 30 percent in 2018 when the minimum wage increase was an easier-to-swallow $0.50 per hour.

I mapped all the trends, shared the significant outcomes with

membership and continued to dig. I interviewed Membership Team members, directors and the CEO asking: “What are you hearing from members?” “Who is most at risk?” “What did we learn in 2017?” “What do members need to survive this?”

I pored over the hundreds of pages of membership surveys from 2014, 2016 and 2018 to see how members started talking about the minimum wage, how it progressed and what the fears and impacts were.

The data and anecdotes started to show differences in experience and stress among industry segments and then geographically. Much of lodging would be able to absorb the extra $1.50 per hour. Lex Nepomuceno, our senior director of communications and technology, said “it’s a matter of scale.” Seattle, SeaTac and Tacoma members were thinking “more of the same.” And our small restaurant members in rural counties emerged as the most at risk of not surviving this increase.

We conducted an email member poll and collected data in the field to learn how many members truly do not know about the increase. We learned about one-third of our membership did not know about January 2020’s statewide minimum wage increase to $13.50 come September 2019.

After about one month of collecting data, we understood what was happening and who was at risk. Now, we had to figure out: How can we ensure all our members know about the rising labor costs and outfit them with a battle pack of resources so they can survive?

“I don’t have anybody feeling like the cost-saving programs are going to be enough,” said Marla Fruit, our territory manager for the Eastern Washington Territory.

Welcome to the HUB On Sept. 30, 2019, the Washington Hospitality Association launched its first-ever, members-only, secure online access HUB filled with tools to help hospitality businesses increase revenues and cut costs. The Hospitality Industry Survival Strategies HUB will give you many roadmaps to mitigate all the new regulations added the last few years that have forced changes in your business.

We designed all of the content just for you. From labor cost calculators to podcasts and videos you can absorb on your commute, the HUB is full of tools for busy general managers and owners who do not have time or significant budget, yet must adapt to survive. Content meets strict quality standards, and it includes what your peers are doing and case studies.

We’re tapping renowned industry experts like Rick Braa who in a “Beautiful Mind” moment scribbled the perfect formulas to help you determine how much extra labor cost will be for you in 2020. We’ve turned the formulas into an easy online calculator in the HUB. This fall and winter, our team will be using every tool in its arsenal, including this magazine article, to raise awareness that the minimum wage is increasing. Please help the cause by sharing the news with your peers. Some are unaware, while others are misinformed and don’t believe the higher minimum wages, including in Seattle, apply to their business.

Log on to access.wahospitality.org to get your login and tap into all of the tools. New resources are being added weekly.

“The ones who will weather the storm have very thoughtfully planned for it,” Fox said. 

So, what solution would be enough?

October 2019 │ 23

Sponsored Content

5 FAQ’s Regarding Employee Benefits Administration (Ben Admin) Software For many of you, new hire paperwork has been replaced by a “welcome email” linking your new employee to their required documents. Your time clock has been replaced by your POS system and payroll can be communicated with a few clicks of a mouse.

Technology has solved many of your HR functions - So why are you still asking your employees to complete insurance applications on paper?

What issues does Benefits Administration software solve?

Incomplete Applications – Employees can’t turn in incomplete or illegible applications. The software will flag any missing data and require the employee to fill in the blanks. No more annoying calls from your broker or carrier asking for missing data.

Late Enrollments – After entering an employee’s hire date or benefits eligibility date, the software can take over. Enrollment windows can be set up so that employees must complete their enrollment in a timely manner or accept a waiver of coverage. You’ll never again be in the situation where an employee must be retro enrolled because they brought you their applications months after their effective date.

Missing Payroll Deductions – Employees will see the cost of their benefits as they enroll. Once the enrollment is completed notifications can be emailed to whoever processes payroll initiating the proper deductions.

Failing to appropriately deduct health insurance premiums from your employees is an expense you don’t need. Getting deductions set up on time ensures your employees pay their fair share of their benefits.

What is my broker’s role?

National HR / TECH / Payroll providers such as Gusto, Zenefits and Paychex offer access to ben admin platforms but rarely have local brokers ready to service the day to day needs of your employees.

Sacrificing customer service for technology isn’t a path most of us want to go down.

Forward-thinking local brokers are beginning to offer ben admin software alongside top notch customer service and local market knowledge. These brokers recognize the efficiencies ben admin software can offer and are advising their clients to adopt this technology.

How flexible is the software and can it integrate with systems already in place?

Benefit administration is only one of three primary HR functions.

A quality software platform should offer modular integration with both employee onboarding (new hire paperwork) and payroll.

Because you probably already have systems in place for these functions you may not want to start from scratch just because you have a new ben admin platform. Conversely, if you are looking to move all of you HR functions into the cloud, you need to ensure that a one system solution is available to handle the tasks and convey the necessary information electronically.

24 │ wahospitality.org

How does the software communicate with my employees?

Whether you utilize new hire functions or simply use the software for ben admin you can set up an employee in a matter of seconds.

After entering the employee’s full name, date of hire, email address and some sort of eligibility qualifier (full time vs part time, hours worked, class, etc.) a welcome email is sent to your employee.

They will be responsible for creating a username and password and entering their personal information, including dependents.

While electing benefits, your employee will be able to view benefit summaries, compare multiple plans if offered and see the cost of their benefits (per paycheck) as they make elections for themselves and dependents. Once elections are made and e-signatures are affixed and time stamped, the software emails your broker, payroll department and anyone else you want to notify of an enrollment change.

What does the software cost?

There are numerous factors that drive the cost of a ben admin software package. Typically, a per employee per month fee is charged. However, some providers will charge higher fees if you don’t use their payroll system or assign them as your benefits broker. Additionally, depending on which modules you choose to turn on, your monthly rate may go up as you use more of the software’s capabilities.

With that said, you can also find opportunities where the software is provided to you free of charge.

The real answer to the question, especially for smaller operators who do not have a designated and trained HR manager, is the cost of failing to properly handle protected personal information and or completing HR tasks in a timely manner.

Benefits administration software puts the “paperwork” in the hands of your employees and reporting modules help your managers ensure completion. Protected personal information is stored securely and insurance applications are communicated electronically.

In my opinion, the software cost is insignificant when compared to the time your managers save and the accuracy by which they complete their HR tasks.

Gordon Kushnick is the owner of Essential Benefits, a local independent employee benefits agency based in Seattle. Prior to founding Essential Benefits, Gordon owned and operated fullservice restaurants in Seattle for nearly 20 years.

For more information on Essential Benefits, employer sponsored health insurance programs (Including the Washington Hospitality Association’s H.I.H.I.T. program), or for a live benefit administration software demo, please visit Essential Benefits at the upcoming Hospitality Convention (Nov 3- 5) or contact Gordon directly at gordon@essential-benefits.com / 206-465-5019

HOSPITALITY

CAREERS

NAVIGAT R Show your employees the many pathways they can take to a long-term hospitality career.

OWNER HOTEL GENERAL MANAGER RESTAURANT MANAGER EXECUTIVE CHEF FINANCIAL CONTROLLER DIRECTOR OF REVENUE

WHAEF.ORG/CAREER October 2019 │ 25

Sponsored Content

Year-end Planning for Financial Success

In addition to the changing colors, arrival of pumpkin spice lattes, and holiday planning, fall is also a great time for comprehensive year-end financial planning. Hospitality businesses face unique challenges including seasonality, changes in the economy and government regulations as well as increasing competition.

Berntson Porter understands these challenges. Through careful planning and collaboration, our experts help companies in the hospitality industry comply with tax and financial reporting requirements as well as streamline their financial processes by providing insights and valuable consulting services along the way.

Here are several items to consider to position your business for success this fall: Plan for your tax return by optimizing tax credits and deductions – The tax landscape is ever changing and there are numerous tax incentives that are available for hospitality companies.

Work Opportunity Tax Credit (WOTC) – This federal tax credit is available to employers that hire a certain class of eligible employees that have consistently faced significant barriers to employment. Examples of eligible employees include qualified veterans, Supplemental Nutrition Assistance Program (SNAP) recipients, ex-felons, and vocational rehabilitation referrals. An employer must obtain certification that an individual is a member of the targeted group before the employer may claim the credit.

FICA Tip Credit – Restaurants are able to request a credit on their federal tax return for Social Security and Medicare taxes paid by the employer on certain employees’ tips that are not used to meet the federal minimum wage. Tax savings by claiming the FICA Tip Credit can be significant, but may require professional assistance to calculate as certain amounts, such as service charges, may not apply.

R&D Tax Credits – More companies than ever are eligible to claim the R&D Tax Credit and take advantage of its benefits.

Any company that designs, develops, or improves products, processes, techniques, formulas, inventions, or software may be eligible for the tax credit. For example, a winery, brewery or distillery that develops a new bottling process would potentially qualify. Credits can be calculated based on actual materials and research costs incurred and employee payroll amounts.

Bonus Depreciation and Cost Segregation – The Tax Reform 26 │ wahospitality.org

Act of 2017 negatively impacted the tax liability for restaurant owners by eliminating the depreciation category for 15-year qualified restaurant property. However, businesses may be able to take advantage of increased bonus depreciation for qualified property components identified through a cost segregation study. Companies may also be able to take advantage of qualified improvement property eligible for Section 179 expensing, such as roofs and HVAC. Prepare for financial reporting requirements – Fall is a good time to negotiate your level of financial statement reporting requirements with your lender as the different levels of service (audit, review, compilation) have varied costs and time commitments. Your lending arrangements may also require you to maintain certain financial ratios. Reviewing covenant compliance prior to year-end together with tax planning will allow you to address any potential problems in advance.

Review current year performance and set goals for next year – Planning for a successful year starts with a review of current year operating results, establishing goals and preparing a budget for the upcoming year. Setting a budget is helpful in the preparation of long-range goals and short-term objectives by planning for the most economical use of labor, facilities and capital. Other valuable analyses include benchmarking and internal control review. Benchmarking involves comparing the company’s policies, products and strategies to other companies in the same industry. An internal control review is an evaluation of current processes and procedures to help ensure that a company is safeguarded against fraud or financial loss as well as improve financial reporting and operations.

Estate planning and gifting – Estate planning is an important element of any business owner’s financial plan to protect their wealth and legacy. Comprehensive planning to understand your legacy intent, tailor an estate plan to meet your goals and ensure that your plan is structured to perform according to your wishes should be performed and revisited any time there are changes impacting your family and/or business. Year-end is also a good time to plan for your charitable and holiday giving.

For more information on how we can help your company reach its goals, please contact Rebecca Young, CPA, Senior Manager and Hospitality Practice Group Leader, at 425-289-7632 or ryoung@bpcpa.com.

The industry that serves.

People | Careers | Communities

REGISTER TODAY:

HOSPITALITYHILLCLIMB.ORG

October 2019 │ 27

INDUSTRY CALENDAR October/November SERVSAFE® MANAGER Oct. 23

Providence Hospital Centralia

Oct. 24

Sysco Spokane

Oct. 28

FSA Everett

Nov. 5

Bargreen Seattle

Nov. 11

FSA Kent

Nov. 12

Bargreen Tacoma

Nov. 13

Chrysalis Inn & Spa Bellingham

View full class list and register at: whaef.org//training-schedule 360-956-7279

MEETINGS Oct. 9

Seattle Restaurant Alliance Board Meeting

Oct. 9

MSC Sub Committee Meeting

Oct. 10

Vancouver Government Affairs Regional Meeting @ Hampton Inn & Suites

Oct. 15

Spokane Hotel Motel Association Meeting

Oct. 15

Seattle Government Affairs Regional Meeting @ Ray’s Boathouse

Oct. 15

Spokane Hotel Motel Association Meeting

Oct. 17

Seattle Hotel Association Board Meeting

Oct. 17

Seattle Hotel Association Membership Meeting

Oct. 22

Edmonds Government Affairs Regional Meeting @ Salt and Iron

Oct. 22

Finance Committee Meeting

Oct. 29

Washington Hospitality Association Board of Directors Quarterly Meeting

Oct. 30

MSC Board Meeting

Oct. 30

Education Foundation Board Meeting

Nov. 5

Bellevue Government Affairs Regional Meeting @ The Westin Bellevue

Nov. 5

Executive Committee Monthly Meeting

Nov. 6

Seattle Restaurant Alliance Membership Meeting

Nov. 12

HIHIT Meeting

Nov. 13

Retro Trustee Meeting

Nov. 13

Seattle Restaurant Alliance Board Meeting

Nov. 14

MSC Sub Committee Meeting

Nov. 20

Spokane Hotel Motel Association Meeting

UPCOMING EVENTS Nov. 3

Washington Hospitality Convention 2019 @ The Westin, Bellevue

Jan. 27

Hill Climb and Taste Our Best

Feb. 1

Seattle Evening of Hope Black & White Ball

28 │ wahospitality.org

NEW MEMBERS 24 Taps, Spokane 7 Cedars, Sequim Agave Cocina & Cantina, Redmond, Kent Baker’s Seattle, Seattle Bar Cotto, Seattle Barlow’s Public House, Vancouver Belem’s Café, Mount Vernon The Bread Peddler, Olympia Cafe C5, Ellensburg Comfort Suites – Airport, Tukwila Devil’s Brew & Blissful Blends, Spokane Double Trouble, Seattle Freeland Café, Freeland Golden Corral, Puyallup Hilltop Alehouse, Seattle Hilton Garden Inn Seattle Airport, SeaTac Holiday Inn Express, Union Gap Hotel Indigo, Everett Lighthouse Drive In, Aberdeen Lucky Dynamite, Seattle Macaluso’s Italian Restaurant, Ruston Madison Inn, Spokane Main Street Cookie Co., Rainier Mainstay Provisions, Seattle

Midway Pub, Moses Lake Olympia Oyster House, Olympia Paine Field Beecher’s, Everett Pizza Time, Olympia Poke to the Max, Seattle Restaurant Homer, Seattle River Rock Taphouse, Spokane Round Table Pizza, Kennewick, Pasco, Richland Samara, Seattle Saratoga Inn, Langley Scofflaws Book Club, Spokane Shore Acres Resort, Loon Lake Sisters Restaurant, Shelton SmallCakes, Renton Split Coffee & Alehouse, Spokane The Elwha Hotel, Port Angeles Tizley’s EuroPub, Poulsbo Triplehorn Brewing Co., Woodinville Two Town Cafe & Pub, Tacoma Two Winey Bitches, Spokane Vitaligent Services LLC, St. Louis Windy N Ranch, Ellensburg

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Always know where keys are and who has them in real time. All key activity is automatically recorded for reporting and compliance purposes.

AssetTracer Locker product line allows organizations to efficiently manage and track use of a variety of assets, equipment and electronic devices needed in the daily operations. Many

hotels have adopted them to manage, charge and track tablets and small mobile devices used by service staff and housekeeping, like radios, smart phones, and iPods.

Visit our website to learn more: www. realtimenetworks.com or call us on 1-800-3312882.

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Ask the Expert How to use the association’s labor cost calculator to help you navigate minimum wage increases

By Rick Braa, CHAE Minimum wage is set to increase. What is the best way to discover how much to increase pricing and/or offset costs?

The Washington Hospitality Association has designed and made available a calculator within the Hospitality Industry Survival Strategies HUB to help with building a strategy around offsetting or even benefiting from increasing minimum wage. The calculator has a number of factors to enter, in order to get the most out of it: 1. Enter Annual Sales—This is simply the total of sales for a full year, use the last 12 months. This is important in order to calculate the annual increase in prices needed to maintain or improve margins.

2. Slide the lever left or right to set Average Guest Spend Per Guest—This is an average of what a guest spends.

By knowing annual sales and average guest spend, the number of annual guest visits is calculated. This is important in case you think a loss of guests is possible due to price increases or other factors.

3. Enter Annual Net Income—From this information total expenses will be calculated in reverse allowing total expenses to be increased for inflation and factored into the price increase calculation further down the calculator.

4. Enter Annual Number of Hours at Minimum Wage— These hours will likely be server, bartender and busser hours for the year.

5. Enter Raise—For state and small Seattle employers the rate will be $1.50 and for large employers there will be an increase based on cpi, likely around $0.50.

6. Additional number of hours subject to increase—Some employees will receive a raise, either because the $1.50 increase jumps over the current wage or tightens it up to minimum wage too closely, or wage earners who are going to receive an increase regardless of minimum wage.

7. Enter Raise—This is the amount, on average, of those non-minimum wage earners receiving 30 │ wahospitality.org

increases, likely kitchen, front desk and management.

8. Dropdown to Inflation percent on other expenses, includes rent—Generally costs increase at least annually on nearly everything including B&O taxes and rent.

There are several percentage choices under the dropdown, select one.

9. Enter Mail Results—Place your email address in this box.

10. Press Email My Results!—This button is highlighted in red at the bottom of the calculator and will be pressed once all necessary adjustments are made to offset or profit from the price increase.

Based on all the information entered above, the price increase needed to maintain net income will calculate automatically along with some other interesting information.

This number assumes there is no loss in guest traffic. If you believe you will lose some guest visits simply increase pricing more to cover those losses.

While this increase is forced and uncomfortable, use this as an opportunity to tighten and strengthen operations. Most companies are going to increase pricing. Keep in mind service must improve on top. Far too often menu prices increase and service remains the same. Operators can fail to realize those receiving tips are receiving a substantial increase on the tip side as well. For example, if prices are increased on top of minimum wage, 10% on a $25 guest check average, a server is earning another $0.50 on top at 20% tip. This presents an excellent opportunity for sharing through tip out to the kitchen and support staff and a good way to shift some of the income from server/bartender to kitchen staff.

The increase in minimum wage is daunting, but with the proper strategy and higher menu prices, higher minimum wage may spur additional profitability. 

For more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and To use the calculator within consulting firm specializing the Hospitality Industry in helping companies grow Survival Strategies HUB, visit profitability.

access.wahospitality.org.

Put your best

Fish forward.

Food waste is bad enough. Contamination is worse! How do you stop a bad fish from reaching the table? You make sure that your line staff knows the rules, knows how to how to detect bad product, and absolutely knows how to rotate your walk-ins so that you are always putting your best ingredients on the plate. Do your people know how to do that? Let’s hope so.

Safe service is good service.

ServSafe is the best service.

Train your staff today!

VISIT WHAEF.ORG for more info.

I’m ALLERGIC. Allergy training saves lives.

Be a cool cat. Train your staff to be allergy aware.

Get ServSafe certified today.

VISIT WHAEF.ORG for more info.

SERVSAFE ALLERGENS SERVSAFE MANAGER HOSPITALITY TRAINING SOLUTIONS HOSPITALITY TRAINING SOLUTIONS

PLEASE JOIN US.

HOSPITALITY CONVENTION www.wahospitalityconvention.com

November 3-5

Westin Bellevue

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