Supply And Demand: Amid Worker Shortage, Outer Banks Businesses Prepare For Summer
With the pandemic easing its grip, the summer vacation season that unofficially begins this weekend is expected to set tourism records on North Carolina’s Outer Banks.
That’s great for the local economy, which relies on visitors. But a major labor shortage means business owners won’t be able to take full advantage of the crowds.
In a sense, the Outer Banks has become one long, sandy experiment in the effects of shifting supply and demand.
Visitors, eager to enjoy life after a year of pandemic isolation, are already here in extraordinary numbers, as are new, permanent residents who fled cities to telecommute from somewhere more pleasant.
That’s the demand side.
But the supply of workers to serve them is far too small.
Lines can already be unusually long at restaurants and store cash registers. Restaurants are closed more days, and shop shelves aren’t always stocked.
On a recent day Brent Hill toured the kitchen of his restaurant in Kill Devil Hills, Jack Brown’s Beer and Burger Joint. His kitchen crew is bracing for another night serving crowds without quite enough help.
“I’m not going to kill my crew for just a dollar."
Normally he gets six international students to work over the summer.
“And because of the visa challenges, both from a geopolitical standpoint, COVID protocols, and you know, the moratorium that was put down, we are probably only getting one, she will be about a month late,” he said. “So, I am in non-burnout mode for my crew.”
Non-burnout mode for him means making decisions daily about whether to offer takeout, and whether to close one day a week, or even two days a week instead of staying open his normal seven.
From Ocracoke in the south to Corolla in the north, business owners are all trying to find their own non-burnout modes. Restaurants are cutting not only days, but hours and even menu items to reduce labor needs.
Many employers here rely on college students from other countries for a seasonal labor boost. In part because American students can’t stay for the whole season.
Not far from Hill’s place, Grant Sharp was in his kitchen at Max’s Italian Restaurant.
He also normally augments his summer staff with half a dozen international workers and says it’s a great experience for him and his permanent team, and for the visitors.
“I've had employees from Mongolia, China, Russia, Poland, Belarus, Lithuania, Serbia, Macedonia, Moldova," Sharp said. "A pretty good cross section of former Soviet republics, and some others peppered in there."
But this year, as he put it, the cavalry isn’t coming. He’s dropped from six days a week to five to ease the impact on his team.
“I’m not going to kill my crew for just a dollar,” Sharp said. “I mean, it’s more important that all of my employees are doing well and are happy and have time, myself included, because we’re not machines.”
Another Problem: Housing For Workers
About 1,800 international workers came for the summer in 2019, and many worked two jobs. It’s unclear how many will come this year, said Jamie Banjak, who heads the Outer Banks international student outreach program, which works with the U.S. State Department local businesses to bring in the student workers.
Nationally the program isn’t back up to speed yet, and continued restrictions on international travel in many countries aren’t helping. A state department website tracks the number of approved visas on a map.
“Right now, our number looks pretty low,” Banjak said. “Comparatively, it does say right now that we had 125 visas that have been approved for this area, I'm just not sure that we actually have 125 beds at the moment."
It’s hard to know how many will eventually be able to come. And for those already approved, if employers can’t guarantee the beds, those workers could be sent somewhere else.
"There was nothing available, they really didn't have a choice."
And that underlines another cause of the Outer Banks labor problem. Housing for workers has been under pressure for years as the small supply of real estate on the islands gets more and more expensive. What’s left is being squeezed by rising demand for short-term vacation rentals through services like Airbnb. And from all those new year-round residents buying homes.
Richard Hess is Chairman of the Board of Directors for the Outer Banks Chamber of Commerce and a broker with Sun Realty. He says the real estate market is the hottest he has even seen.
“I talk to people every day where they've had an employee that had to move from the area because the house that we're running was sold, there was nothing available, they really didn't have a choice,” Hess said. “And one of the things that we have to deal with down here different from a lot of areas is we don't have multifamily housing. We don't have apartment buildings, per se. It's all single family homes. So they're subject to being sold or something happening to them as opposed to properties that were designed to be rented and nothing else.”
Hill, the beer and burger restaurant owner, has bought a house for his workers. Sharp, at the Italian restaurant, is running the numbers about doing the same. Kitty Hawk Kites, one of most iconic businesses on the Outer Banks, already had some housing, and just bought two more houses and six spots for travel trailers or RVs.
Owner John Harris says the company has had to cut back hours for many of its 28 stores from New England to Florida because of the shortage of seasonal labor. But the situation at its stores on the Outer Banks, is by far the worst.
“They’re recruiting and hiring, we’re working on it every day, but we’re really short-staffed,” Harris said.
He and Banjak, with the international students’ group, say local leaders and developers are trying to come up with fixes for more worker housing.
“You know, people think about the Outer Banks, they don't often realize that it's three different counties," Banjak said. "And, gosh, all these different towns, all these different governments... And until there's an actual regional solution, and everybody realizes that they have some skin in the game, and that they have to work at it together, instead of it being an individual problem, I really don't think there's going to be the magic solution."
She said she thinks they’ll eventually come up with some regional solutions, albeit not quickly.
“I don't want to sound all thoroughly doom and gloom, you know, there are amazing people on the Outer Banks and some fantastic organizations that have been providing support to this program,” said Banjak. “And others. I mean, my gosh, there are what, almost like 400 non-profits on the Outer Banks, and this is an extremely giving community that likes to get things done."
Banjak continued: "And so there are talks, I don't know if I want to go so far as to say projects, but there's definitely stuff in the works where people are trying to move towards solutions for this with different you know, I've talked to some builders and developers, some nonprofits and folks who have some lands to potentially donate like, there's, it's just a matter of, again, it's getting a regional solution that works.”
But for now, employers are scrambling.
Harris had to leave an interview so he could climb in a company van and head north. He needed to look at another house he wants to buy for his workers.