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Wednesday, 11 April 2007 00:00

Service providers: As housing costs escalate, regional hospitality businesses look for ways to cushion the blow for the working class

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When the well heeled are in need of a pampered retreat in Western North Carolina, they often look toward the Old Edwards Inn and Spa in Highlands.

 

Service in the deluxe rooms includes twice-daily housekeeping, a concierge, valet parking and a 24-hour butler’s room. Packages, such as the $1,910 two-day retreat for couples, also are available. The couples’ package includes a two-night stay, rose-petal turndown on the first night, a three-course dinner for two, and “bliss for two couples massage” in the spa.

Providing the level of service guests expect requires 200 employees during the season and 150 in the off-season, said Mario Gomes, CEO/general manager of Old Edwards Hospitality Group. And finding employees who can afford to move to an area where buying a house will cost at least $300,000 is particularly challenging.

But not for Gomes, who solved his employee-housing problem before it occurred. In 2004, while preparing to open the inn, he oversaw the creation of an employee village. Today, most of Old Edwards’ employees live in one of 35 houses on a 27-acre tract just four miles from the inn, and plans are in the works to build 10 more. Rent for a two-bedroom house is $524 a month including utilities, and $625 a month for a three bedroom, which also includes utilities.

“We can look at Atlanta, we can look at Asheville, because we have the ability to offer employees affordable housing,” said Maria Trail, human resources director for Old Edwards Hospitality Group, who also lives in the village. “It is a great recruiting tool.”

 

Shrinking workforce

Not every employer in WNC has been as successful as Gomes in finding solutions to the growing employee-crunch, however.

Though actual numbers are hard to come by, there’s little doubt that the pool of available workers in the tourism and hospitality sector is shrinking, said Vicki Greene, director of planning, development and workforce for the Webster-based Southwestern North Carolina Planning and Economic Development Commission.

Statewide, the unemployment rate is at 4.5 percent, according to figures released by the N.C. Employment Security Commission last month. The rate hasn’t been this low since January 2001, when it hit 4.4 percent.

In WNC, the traditional mom and pop retail stores and hotels and motels that populate the region are now competing for workers against larger tourism draws and an explosion of big-box stores. Here are some of the latest developments:

Ghost Town in the Sky in Maggie Valley reopens May 25 after a four-year hiatus. The rebirth of the western-theme park requires about 285 full- and part-time workers.

Harrah’s Cherokee Casino, already the region’s largest private employer west of Asheville with 1,850 workers, plans to add 500 to 1,000 new positions over the next five years. The new jobs are being created as part of a $650 million expansion and renovation.

Wal-Mart already has a super center in Sylva, and plans to open another in Waynesville. Talks between the retail giant and leaders of the Eastern Band of Cherokee Indians about building one on the Qualla Boundary are ongoing. An effort to super-size the existing Wal-Mart in Franklin has stalled for now, however.

Home Depot plans to join Wal-Mart at its new home on the former Dayco rubber plant site. Construction on the future Waynesville Commons is expected to start this summer. This is Home Depot’s first venture into this part of the state, and it will face competition from a new Lowe’s recently opened in Sylva. Lowe’s also already has locations in Franklin and Waynesville.

 

A special challenge

Finding workers in the Highlands-Cashiers-Sapphire area — “the plateau” — is particularly challenging for employers. There are 291 houses valued at more than $1 million in the Highlands district alone, according to the Macon County tax office.

“People are priced out of the housing market,” said longtime realtor John Cleaveland, a former mayor of Highlands. “Most of the homes that are rented are on a seasonal basis.”

Cleaveland said he knew of nothing priced below $250,000, and said starter houses that would be livable all year start at about $300,000.

Traditionally, most of the plateau’s workforce has driven in from nearby communities to work in the area’s many restaurants, retail shops and country clubs. But Highlands Mayor Donald Mullen says the day could come when there is enough lucrative work “off the mountain” to destroy the area’s longstanding employee base.

“It’s a developing problem,” said Mullen, who recently formed an eight-member committee to look at the issue of affordable housing in Highlands. “What’s happening is property values are escalating to the point that it’s difficult for people who work here to live here.”

That limits diversity in the community, potentially excluding all but the affluent from making their home in the town, he said. Mullen cited employees of the school, hospital and police department in addition to the plateau’s seasonal workforce.

Holly St. Clair, sales and catering manager for Old Edwards Inn and Spa, said she would have been forced to look for a rental house ranging from $900 to $1,000 a month without the availability of employee housing.

“It’s close to work and very affordable,” she said.

Ginger Slaughter, a member of the town’s affordable housing committee, said she believes that without residents such as St. Clair and other workers living in it, Highlands could lose its village character.

“Highlands, in my opinion, would suffer greatly and lose a lot of its diversity if it became only a town for the very affluent,” she said. “Any community that doesn’t have a diversity of people is shortchanged.”

Slaughter said housing is one issue, but so is affordable childcare, the ability to dine out and the availability of reasonably priced shopping.

The committee expects on April 13 to release the results of a survey sent to the hospital, the town’s k-12 school and the police department. Employees of those institutions were asked, in addition to other questions, whether they would want to live in Highlands if there was affordable housing.

Mullens said there are residents in the community so concerned about the issue they have offered to donate land for future affordable housing.

 

‘A multi-faceted problem’

Locating employees in a rural area where developable land is at a premium is a challenge, but that’s not the entire picture, Greene said. Like Slaughter, she pointed to a variety of factors.

“It is a multi-faceted problem,” she said. “Is housing an issue? Absolutely it is. But childcare is also an issue. And it’s about jobs paying a living wage. If you have a living wage, you can eventually afford to buy a home.”

Harrah’s Cherokee Casino, which opened 10 years ago this November, is looking to address all those issues that could limit its ability to find quality employees, said Director of Human Resources Jo Blaylock.

“We probably have a more narrow hiring pool than most Harrah’s properties do,” she said. “We have grown faster than the surrounding area has been able to keep up with.”

Good wages, a complete benefits package and the possibility of advancement have enticed some of Harrah’s employees to drive more than an hour one-way each day to work there. But some potentially good employees are probably eliminated outright because they don’t want such long commutes, Blaylock said.

Many of the campgrounds in Cherokee rent annual spaces, and some Harrah’s employees live there in mobile homes five days a week. But that’s not a good long-term solution to the burgeoning housing-worker problem, Blaylock said.

The casino has talked to Qualla Housing in Cherokee about building apartments or town houses on the Qualla Boundary, and also is in contact with a private developer who is getting ready to do the same outside the reservation’s boundaries.

Blaylock said the casino also is studying what can be done to aid manager-level employees who want to purchase their own homes.

Fortunately for the casino’s expansion plans, she said, is that much of the anticipated growth will be in retail sales, at the hotel and in restaurants. People younger than age 21 cannot work on the casino gaming floor, but can work in the other establishments.

 

Going overseas

One trend in the region’s workforce that could help make up a worker deficit is the practice of bringing in students from other countries. Harrah’s and country clubs are already dependent on this seasonal boost.

A group from Bali is currently working at Harrah’s, and more students from other countries have been lined up for the summer, Blaylock said.

“They help us fill hard-to-fill positions,” she said, citing positions in housekeeping and janitorial services.

Harrah’s uses about 200 foreign students each year, each working 60- to 90-day stints. The company that does the recruiting is also responsible for housing the students, Blaylock said, and usually contracts with a local hotel.

Gomes also relies on foreign students. He touted their work ethic and willingness to do whatever is asked.

“They work really, really hard,” Gomes said. “Harder than I’ve seen most of our kids work. Without them, it would be very rough to get through the season.”

Gomes houses the student workforce in his village and at a six-bedroom apartment building near the inn owned by Old Edwards Hospitality Group. A few will stay outside of Highlands.

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