Ideas to help Oregon’s hospitality industry

CEO Corner: ORLA Advocacy Initiatives Address Key Industry Challenges
By Oregon Restaurant & Lodging Association,

The hospitality industry is navigating a tough landscape, with restaurant and lodging operators grappling with rising costs, workforce shortages, and evolving consumer expectations. To support businesses in overcoming these challenges, the Oregon Restaurant & Lodging Association (ORLA) is actively advocating for solutions that address key financial and operational pressures. From tackling labor costs and skyrocketing food prices to addressing credit card swipe fees, delivery app charges, and service-related policies, these initiatives are designed to ease burdens and strengthen the industry’s future.

Here’s a closer look at the critical issues and the steps being taken to drive meaningful change.

1. LABOR COSTS
Challenge: Rising minimum wages and increased labor costs put financial pressure on restaurants and lodging businesses.

ORLA’s Initiatives:

• Protecting statewide pre-emption on local minimum wage increases. Oregon has been surpassed by many local governments outside of our state on the west coast who continue to arbitrarily increase minimum wage rates. This is occurring elsewhere outside of Oregon because of the increasingly difficult lift of passing a statewide law governing local government labor regulations. ORLA played a key role in helping pass the statewide pre-emption in the 2016 Oregon Legislative Session, enacting 3 minimum wage rates based on county boundaries – all of which increase annually in alignment with Consumer Price Index (CPI) changes. This has allowed for a consistent statewide policy to simplify compliance and prevent a patchwork of local wage laws.
• Supporting workforce development programs that offer training and career advancement opportunities to improve retention. An intentional approach to ongoing professional development is a key strategy to improve workplace cultures and retain talented employees.

2. FOOD PRICES
Challenge: Supply chain disruptions and inflation continue to drive up food costs, affecting restaurant margins.

ORLA’s Initiatives:

• ORLA launched a new partnership with RestaurantOwner.com – an online subscription resource with a host of solution-oriented trainings and templates to assist owners and managers with the key task of fine tuning food purchasing decisions and more precise inventory management controls.
• ORLA will work with state legislators on a review of the state’s cage-free egg mandate that passed in the 2019 legislative session and took effect on January 1, 2024. The cost of what should be the most affordable protein for Oregonian families has skyrocketed in large part due to Avian flu outbreaks facing egg producers. Still, prices have increased due to a smaller supply of eggs due to the government cage-free egg mandate. We are confident that increasing supply by opening up Oregon’s market to all eggs once again will help drive down costs for Oregon families and the state’s hospitality industry.
• ORLA’s member network of food distributors which includes McDonald Wholesale, US Foods, Sysco, and Harbor Foodservice among others commonly host training sessions to assist their customers with menu planning and food cost control services. These critical partners want their customers and our members to stay in business. Identifying sustainable solutions for food purchasing decisions is in both their best interest and in the best interest of Oregon’s restaurant industry.

3. HEALTH INSURANCE
Challenge: Rising healthcare costs make it challenging for restaurants and lodging businesses to provide benefits for employees.

ORLA’s Initiatives:

• ORLA is exploring development of an association health plan. Our goal is to launch a new program in alignment with the 2025 health insurance renewal period so the plan can be in full swing for calendar year 2026.
• ORLA Hospitality Partner, Garth T. Rouse & Associates, continues to work with members to identify health care solutions that make sense for every member’s unique situation including medical, dental, vision insurance, COBRA and self-insured plans, retirement plans, and supplemental plans to name a few.

4. CREDIT CARD SWIPE FEES
Challenge: High transaction fees imposed by credit card companies reduce profit margins for restaurants.

ORLA’s Initiative:

• Supporting federal and state-level legislation that seeks to reduce or cap credit card swipe fees. Our key focus this year is continuing to build momentum for the Credit Card Competition Act in Congress. Industry members are encouraged to join ORLA on trips to Washington D.C. to advocate for this important legislation.

5. CHILD CARE
Challenge: Lack of affordable and accessible child care options affects workforce availability and retention in the hospitality sector.

ORLA’s Initiatives:

• Advocating for tax incentives and funding to support employer-sponsored child care solutions.
• Helping amplify the newly created “Oregon Employer Child Care Toolkit” and expanding resources being provided by Child Care Works for Oregon.

6. DELIVERY APP FEES
Challenge: High commission rates from third-party delivery platforms significantly reduce restaurant profitability.

ORLA’s Initiative:

• A proposal to increase delivery fees in Oregon is currently under discussion in the legislature as a way to increase transportation funding for the Oregon Department of Transportation. The new proposal seems focused on the growing fleet of delivery vehicles owned by Amazon and other delivery providers. ORLA will be working to ensure food delivery services are exempt from the new proposal if it were to move forward in the legislative process.

7. SERVICE CHARGES & TIPPING ISSUES
Challenge: The debate over service charges versus tipping continues to impact both customer perceptions and employee earnings.

ORLA’s Initiatives:

• Educating restaurant owners on the legal and operational implications of service charges versus traditional tipping models.
• Advocating for policies that protect tip income while ensuring fair compensation for all staff.
• Providing best practice guidelines for transparent communication with customers regarding service charges and gratuities.
• Providing tip pooling templates restaurant and lodging owners can customize for their own business needs.

Through these initiatives, ORLA remains committed to supporting Oregon’s restaurant and lodging industry by advocating for fair policies, providing business resources, and working towards sustainable solutions to industry challenges. | Jason Brandt, President & CEO, Oregon Restaurant & Lodging Association

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