Lynn Minges, president of the N.C. Restaurant & Lodging Association, joined High Point University President Nido Qubein in the Power List interview, a partnership for discussions with influential leaders. Interview videos are available at www.businessnc.com.
Representing the state’s powerful hospitality industry has been a long-term pursuit for Minges, including 10 years as the president and CEO for the North Carolina Restaurant & Lodging Association. The industry represents more than $27 billion in annual sales and about 11% of the state’s workforce. Prior to her trade association role, Minges was a key part of N.C. Department of Commerce tourism efforts. The native of Bladen County is a graduate of Peace College and N.C. State University.
This story includes excerpts from Minges’ interview and was edited for clarity.
Lynn Minges, welcome. You’re the president and CEO of the North Carolina Restaurant and Lodging Association, which has an enormous impact on
our economy.
It’s an honor to be here with you and be on your beautiful campus here in High Point, certainly a bright spot here in our state. It has been my honor to serve the North Carolina hospitality industry for my entire career. There are about 20,000 food service establishments across North Carolina and about 2,000 lodging properties.
There are restaurants and hotels in each of the 100 counties, so they’re important employers all across the state. We’re also the sixth-most visited state, after California, Florida, New York, Texas, Pennsylvania. About 60 million people visit North Carolina a year.
Is it a growth industry?
Our industry is growing. We look at pre-pandemic and post-pandemic, and a lot has changed in our state. We’ve added a tremendous number of restaurants and hotels in the state. We need more employees today than we did even pre-pandemic. And that, perhaps, is our biggest challenge.
You served under two or three different governors as the deputy secretary of the Department of Commerce.
I did work for three governors and five secretaries of commerce, and I’ve had experience working under some amazing dynamic leaders. My role is to work inside the government to help grow the hospitality sector and tourism sector. Now, 12 years later, I find myself working for the private sector, trying to get government to stay out of the way, or add value so that businesses can continue to thrive and continue to support people.
We do a better job in North Carolina in that regard, don’t you think?
I think we do. We’ve got a diverse economy which bodes well for us. We are not entirely tourism dependent, which is a good thing when things like COVID hit. And we have a diverse economy, a diverse workforce, a diverse topography. We have urban centers
and rural areas, we have amazing natural scenic beauty as well as conference centers
and conventions.
And thriving regions like the Triangle, Charlotte and the Triad. And all these businesses like Honda and Toyota coming here and making enormous investments in North Carolina and creating all kinds of jobs. Certainly that helps your business.
Oh, it does. With that comes the need for more restaurants and more hotels, more business travel, more meetings, conventions. You know, it all works together really well.
You mentioned COVID. It was a period in which all of us had to adapt and adjust and show grit and courage and faith. It was a frightening period for large business and small business. What did your association do to encourage and inspire these many small business owners.
COVID was a dark day for our industry. I’ll never forget on March 17, the governor went on TV and issued an executive order that folks were to stay home, that restaurants across the state were to be closed. My phone began to ring from business owners across the state. Many of these folks, restaurateurs particularly, live hand to mouth. They live on such thin profit margins that they were literally seeing their businesses evaporate.
They laid off about half their workforce in North Carolina. And we stepped up in an important way during that time. We were fortunate in North Carolina to have a good relationship with government officials, and I think that bode well for us. So, every time there was an executive order, we had a role in working with the administration to craft that in a way that did as little harm as possible to our industry.
We were involved in every single executive order making sure that when that announcement was made, we could answer all the questions from the business owners. And we fielded thousands and thousands of calls from business owners. We also stepped up to try to make consumers feel comfortable when they could come back into restaurants, and that was on May 22.
Even when we opened back up, there were still protocols, mask mandates, tables 10 feet apart, the kinds of things that we had to do to protect our guests, patrons and employees. So we were very much on the front line of all of that. Obviously since COVID, we’ve continued to be engaged today in helping our industry recover.
Are we back to 100% of pre-COVID level of business?
We can’t just go back to 2019 because we’re living in 2023 and, that’s a long time – business growth, new restaurants, new hotels, increased demand. But what I will say is that business is strong across our state. Revenues are up, but largely that’s because prices are up, the cost of doing business is up. Labor costs are up, and so if you look at dollars spent, we are well ahead of where we were in 2019. It costs a lot more to eat out. People are spending a lot more to travel these days, and that’s having an impact.
The association provides legal and legislative guidance. Besides that, do you do seminars on hiring people, motivating employees?
What I like to say to our members is, “We are watching that for you. While you’re running your business. We are interacting with government at every level. Any decision they make that impacts your business, we’re going to tell you about it, we are going to monitor that. We are going to advocate for you if it’s a bad decision that’s going to impact you adversely, we’re going to work to stop that legislation. If it’s a good policy, we’re going to work to get those passed. We’re going to keep you informed and engaged.”
The thing that we do best is that we harness the collective power of the industry. What has been the most fun for me in this role is trying to harness that voice, and reach out across the state to get people involved in effecting change.
We got a $500 million appropriation to help offset the losses of restaurants and hotels in North Carolina. The appropriation was part of the federal American Rescue Plan. And the way it worked was pretty amazing. Any restaurant or hotel that was down in gross sales by 20% got a check for 10% of their losses. It was amazing.
What do you see happening with the labor situation?
It is a big challenge. It was before COVID, and it certainly is today. I think it’s the No. 1 concern of every single restaurant and every single hotel. But a number of our businesses across our state are feeling that pain as well.
We’re preparing to execute a campaign to talk about careers in the hospitality industry. So we think we have an opportunity to lure some of those folks back, to get students interested in careers in the industry, to understand that there are amazing and incredible career opportunities.
Are the larger owners of restaurant chains coming back quicker
and more profitable?
To be fair, it impacted large, small, chain, independent probably equally. There were many restaurant concepts that were dramatically impacted, even if they are chains. When you’re shut down for eight weeks, there are huge losses. And many of them had to adapt their business models. They had to reformulate their dining establishments. They had to pivot to take-out windows, delivery and many of those made huge investments in technology and design. Many large businesses took on an immense amount of debt during COVID.
What makes a restaurant successful?
Good leadership. Managers who take care of their people. I’m always amazed at the incredible lengths that people go to to take care of their people, to be good employers.
A keen business sense. It takes a real smart business owner to run a restaurant in
this environment.
What would be the general profit of a restaurant? Does your association figure out what generally is the gross margin? Perhaps 20%?
Not nearly that, I don’t think. I’m not involved in that side of the business. I do know it’s a thin margin. Some obviously operate on volume, so if they make a dollar a meal, they get that in volume. Fine-dining restaurants probably have a little bit greater margin but also pretty significant risks.
What is your view for 2024 and 2025 for the industry?
Business is brisk. Hotels are working at pretty high levels of occupancy. They’re seeing bookings coming in on an expected basis. I think there are really three challenges they are facing today. One is workforce issues, then inflation with increased cost of supplies. And I’m watching an emerging trend about the health of our urban centers and declining business travel. These are issues we’ll have to reckon with, but business is strong.
I’m encouraged talking with you. Thank you for your leadership and I wish for you great things always. ■