When Eddie Hamann heard his employees found it hard to make ends meet in Orlando, he saw an opportunity to help.
Hamann, a managing member of Andretti Indoor Karting & Games, said a recent survey of the Orlando entertainment complex’s 350 employees discovered many of them were living with three or four people to afford rent. Inflation meant many were saving less making $16 an hour in December than they were with a $13 hourly wage pre-pandemic, he said.
So Andretti raised its starting wage to $17.50 for entertainment workers and $19 for culinary staff this month, rates among the highest across Orlando’s tourism industry.
“If we remove the stress from them having to worry about their bills, then they can focus on the job that we’re asking them to do,” Hamann said. “And as a result, our customers will have a better experience.”
Andretti is part of a growing number of other tourism-focused businesses in Orlando, including Universal Orlando Resort, raising their pay above $15 an hour to attract and keep workers as the hospitality industry’s staffing continues to recover from the COVID-19 pandemic.
Hospitality jobs plummeted during the pandemic as workers were furloughed, laid off or left the industry for better opportunities. In studies of these employees, people who already felt overworked, underpaid and lacked work-life balance said they were easily discarded by employers and the industry when tourism halted during lockdowns and recovery trailed.
Increasing worker pay is just part of the solution, along with increasing time off and other employee well-being benefits, said University of Central Florida hospitality professor Michael “Doc” Terry. But by responding to workers’ concerns, companies like Andretti show they value employees’ feedback and that goes a long way toward resolving staffing issues in a job market where workers are seeking balance.
“Are you going to bite the bullet and pay the extra money and provide the right experience for the employee that’s coming in so they stay and feel good about the culture and being there?” Terry asked.
Universal raised its starting pay to $17 an hour in February and said it would be improving other benefits based on worker feedback.
Disney was the first local employer to announce a path to a $15 minimum wage in 2018. That rate took effect in 2021 and currently remains the same, though Disney has been negotiating a new contract with its unions since August.
Last month, union members rejected Disney’s proposal to gradually increase pay to $20 an hour within five years, saying workers need more sooner. One union’s report says local workers need an $18 minimum wage to meet their basic needs.
The Massachusetts Institute of Technology’s Living Wage calculator estimates the living wage for a single adult without children in Orlando as $18.64. That amount assumes a person is spending around $1,152 a month on housing, but Rent.com quotes the average rent for a one-bedroom apartment in Orlando as $1,814.
Federal employment data show non-supervisory frontline hospitality employees earn an average of $18.42 nationwide.
Wages have “increased quite dramatically” in Orlando’s main tourism corridor in the past two years as businesses also look to offer other incentives to employees such as signing bonuses, insurance plans and educational benefits, said Maria Triscari, International Drive Resort Area Chamber of Commerce president. The chamber does not collect data on the average pay rates of area hospitality jobs.
Staffing at International Drive businesses is still catching up to pre-pandemic numbers, she said.
“We’re getting there, but we still have a little ways to go,” Triscari said. “But we’re seeing some really great results from the [incentive] packages and the new opportunities that are given to the hospitality workers.”
Florida added 16,100 leisure and hospitality jobs between December and January, the last month for which data is available. Over 1.3 million people were employed in the sector in January, nearly 102,000 more than in January 2022.
Federal Bureau of Labor Statistics data show the U.S. leisure and hospitality industry added 105,000 jobs in February, but employment remains 410,000 jobs below February 2020 levels, a decline of 2.4%.
Smaller chains lead the way
Terry said some businesses are passing these increased wage costs onto customers. The clientele understands prices are rising for hotels, restaurants and entertainment, and they are willing to pay more as long as they get quality service.
Andretti has not raised its prices to offset the higher wages and does not plan to do so soon, Hamann said. The company’s Orlando location had 1.3 million customers last year, and 7 million total people visited its six U.S. properties.
Mango’s Tropical Cafe, an International Drive restaurant and nightclub offering dinner shows, pays its staff in part by imposing a 20% service charge added to all checks, owner Joshua Wallack said. The policy has been in place since the Orlando location opened in 2015.
Mango’s found that the system encourages employees to provide better service and replacing a tip-dependent system led to better, fairer pay for all employees, happier staff and less turnover.
With the service charge, the restaurant’s staff makes “well above $15 an hour,” and some people make as much as $65 and $70 an hour, Wallack said.
“They don’t even think about leaving because they just think about how well they can do on their next paycheck and their next shift,” Wallack said.
Mango’s has not had any staffing issues thanks in part to its payroll system, which “creates loyalty with your employees because they’re treated fairly for their efforts,” he said. Even workers who had found other jobs were quick to return to Mango’s when it reopened in June 2021 from a 16-month pandemic-related shutdown.
Wallack said he has encouraged other independent restaurants in the International Drive area to adopt the same service charge policy for years. Owners are just starting to catch on now because of the pandemic’s staffing challenges.
“The evolution of this industry has happened, and it’s important to understand the nuances of where the industry is at so that you can modify your policies to best serve your customers and take care of your employees,” Wallack said.
Andretti has seen little staff turnover in recent years, which Hamann credits to the company showing employees they are appreciated.
“When you take care of your people, the rest of it kind of falls in place,” he said. “You really need to care about what’s going on in their lives. I mean, these are people that are the foundation of your business. Without them, you have nothing.”
For example, when gas prices spiked last summer, Andretti started an “Andretti Pit Stop” program where it offered to fill employees’ tanks for free. Hamann said Andretti spent around $100,000 on the program nationwide over about six weeks but it was worth it to ensure employees could get to work stress-free.
Andretti conducted research that found most other International Drive-area businesses are still offering hourly wages of around $14 to $15, he said. Those rates are on their way up, Hamann thinks, as Florida’s hourly minimum wage reaches $15 in 2026 and employers are seeking qualified staff.
“I truly believe in my heart that within the next 36 months, $20 minimum wage is going to be pretty common for those companies that are committed to providing a living wage to their employees,” he said.
