Economists say demographic shifts in the region have created a fertile environment for hospitality businesses, especially in the food services category. The District and its suburbs have recently seen an influx of Millennial Generation residents, many of whom were lured by the area’s relatively steady job market.
“Those folks tend to be social and eat out,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University.
James C. Dinegar, president of the Greater Washington Board of Trade, said restaurants have been opening at a steady clip in Washington neighborhoods such as the 14th Street NW corridor and U Street.
“There are real pockets of growth, and it doesn’t seem to be coming at the expense of downtown restaurants. It’s cumulative growth,” Dinegar said.
EatWell DC, the company behind Commissary and Logan Tavern near 14th Street NW, opened another restaurant, The Pig, in the neighborhood last year. The pork-themed outpost opened with about 35 employees.
Josh Hahn, EatWell DC’s operating partner, said he once worried about saturation in the fast-gentrifying neighborhood. “I think we always felt at some point that the neighborhood couldn’t handle any more [restaurants],” Hahn said. “But as more restaurants have opened up, more people are going out, because they don’t have to wait as long [for a table], more people are coming from the suburbs.”
Another Washington-based restaurant company, ThinkFoodGroup, also said it has added jobs in the region during the past year. Rob Wilder, chief executive of the firm behind restaurants such as Zaytinya, Oyamel and Minibar, said the company increased its workforce in its local eateries by 10 percent. At corporate headquarters in Penn Quarter, where the staff manages celebrity chef José Andrés’s burgeoning empire of restaurants and food products, the staff grew by 20 percent.
Although ThinkFoodGroup saw a brief dip in sales at its local restaurants earlier this year in the wake of brinksmanship over the “fiscal cliff,” Wilder said business has since bounced back. “People realized the world didn’t end with the budget standoff,” he said.
The company plans to continue adding jobs in 2013.
Although economists agree that much of the money being spent at the area’s leisure and hospitality businesses is coming from the pockets of local residents, marketing organization Destination D.C. says it has seen increased interest in tourism, including from international visitors.
“As you look at the global community, with the strength of the pound and euro, we’re still a bargain,” said Elliott Ferguson, chief executive of Destination D.C.
Ferguson said his organization is planning to reintroduce its “Luxe D.C.” marketing initiative, which highlights five-star hotels and behind-the-scenes access to events. The program is being restored because of the renewed demand Destination D.C. sees for luxury travel experiences in Washington.
Although the job growth in the hospitality industry has been relatively strong, wages in the sector tend to be lower than in categories such as professional services. Fuller said this could have ripple effects on the region’s broader economic growth.
“It does have consequences when you have a lot of salaries that are 20 to 30 thousand dollars,” Fuller said.