Restaurant And Hospitality News – March 7, 2016
By Christine Kern, contributing writer
In news this week, Hilary Clinton calls for an end to the tipped minimum wage; Starbucks’ new loyalty program is not favored by its customers; and the latest Hotel Travel Index reveals some important insights for 2015.
Hilary Clinton Calls For End To Tip Credit Minimum Wage
At a recent rally in New York City, Hilary Clinton told a crowd of union members, celebrities, the mayor, governor, and other attendees that she promises to focus her presidency on issues including higher minimum wage, universal pre-K, and immigration reform, according to AM New York. She asserted, “It is time we end the so-called tipped minimum wage. We are the only industrialized country in the world that requires tipped workers to take their income in tips instead of wages.” Clinton condemned the fact that some tipped workers earn as little as $2.30 an hour. Clinton’s platform to end tipping comes as dozens of New York City restaurants have abolished tipping over the past six months, instituting higher wages by charging more for food. Danny Meyer’s Union Square Hospitality Group led the movement. Clinton supports an increase to $12 an hour for minimum wage.
According to Think Progress, the current minimum wage scale for tipped workers leaves economically vulnerable. They are twice as likely to experience poverty; restaurant servers, some of the most common tipped employees, experience a poverty rate nearly three times higher than the average, and also reveal gender and racial impacts, as women comprise two-thirds of the country’s tipped workers, and people of color represent about 40 percent despite being about 30 percent of the total workforce.
To date, at least eight states have done away with the distinction between tipped and regular employees in their minimum wage laws, resulting in tipped workers’ poverty rates being reduced by a third. They also have smaller wage gaps between men and women, particularly for women of color.
Starbucks Takes A Hit After Making Changes In Loyalty Program
Starbucks recently made some significant changes to its customer loyalty program in order to boost profits, and a number of customers are unhappy with the new policies. Under Starbucks' previous rewards program, customers earned redeemable points for every purchase, whereas the new program awards points for every dollar spent, putting customers who buy cheaper items at a disadvantage. The result has been a drop in Starbucks’ “buzz” score, which dropped 50 percent in eight days, according to Business Insider.
Now Dunkin’ Donuts is hoping to capitalize on Starbucks loss. Nigel Travis, chief executive of Dunkin' Brands Group Inc., told Reuters that he saw the angry Starbucks customers as an opportunity for his company's doughnut and coffee shops. "We feel excited about the change to Starbucks' loyalty program," he said. “We’ve been targeting customers with $5 gift cards." Maxim Group analyst Stephen Anderson projected that Dunkin’ Donuts could see 0.25 to 0.4 percentage point sales growth as a result of Starbucks defections, which would be a welcome boost for the chain that slipped as McDonald’s launched all-day breakfast.
Latest Hotel Price Index Finds Global Hotel Prices Rose Just 1 Percent in 2015
The Latest Hotels.com Hotel Price Index has been released, and found that the average global hotel prices rose just 1 percent in 2015. North America was the only region that saw hotel prices rise (3 percent) throughout 2015. The Index also found that Las Vegas was the most popular U.S. travel destination, followed by New York City, Orlando, San Diego, and Los Angeles. The Grand Canyon National Park also saw a 13 percent increase for the area, with a $116 average price paid per night. Meanwhile, the best values on hotels were found in Reno, Albuquerque, and Jacksonville with prices under $100 per night. American travelers also made more trips to Toronto and Montreal in 2015, with visitors finding the best value in Toronto at $148 per night and an overall 5% decrease in 2015. US travelers also headed for Los Cabos, Riviera Maya, and Cancun in Mexico, and London was the top international destination, despite higher prices in all of these locations in 2015.