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a MAGAZINE from Virginia Restaurant, Lodging & Travel Association

VIRGINIA HOSPITALITY

FALL 2016

INSIDE

Representing VIRGINIA'S RESTAURANT, LODGING & TRAVEL INDUSTRIES

VIRGINIA COLLEGE HOSPITALITY & TOURISM PROGRAMS

5 REASONS

RESTAURANT GROWTH WILL CONTINUE

WAGE & HOUR ISSUES FOR TIPPED EMPLOYEES 5

COASTAL VIRGINIA MAGAZINE

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2013

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November 13-15, 2016

Virginia just may be the perfect state — beaches, rivers, lakes, mountains, wilderness and everything in between. Four distinct seasons provide visitors with something every time of the year. Beyond the outdoors, Virginia is home to thousands of ways to excite your taste buds, hundreds of incredible music and arts scenes, and amazing sports and adventure tourism infrastructure.

SPONSORED BY

FEATURED SPEAKERS: Robert Kulp and Mike Whiteside from DIY Network’s Salvage Dawgs

PRESENTED BY

Roano ke , Vi rg i n ia

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LEISURE

MEDIA

ENGAGING CONTENT Ÿ INTEGRATED CONNECTIONS

R e g i ste r To day at VA1To u r i s m S u m m it.o r g

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PRESIDENT LETTER

VA-1’s Experience Virginia will prove to be a one of a kind opportunity to experience all that Virginia has to offer.

LETTER FROM THE PRESIDENT

STAFF

As we move into the fall and out of Virginia’s Summer tourism season, VRLTA is busier than ever. We are very excited to launch the VRLTA Ordinary Awards on the evening of Monday, October 24 at the beautiful John Marshall Ballrooms. Since announcing our awards back in July, we have been asked many times, “Why Ordinary Awards?” Well, the Merriam-Webster dictionary defines ordinary as “a meal served to all comers at a fixed price” and “a tavern or eating house serving regular meals.” While the term may be a little outdated this day and age, it hits very close to home. Chinn’s Ordinary was founded in Middleburg, Virginia around 1728 and when first built it was a popular waypoint for travelling

President Eric Terry eric@vrlta.org Director of Membership Katrina Washington katrina@vrlta.org

colonists along what is now the John Mosby Highway. It stood roughly halfway between Alexandria and Winchester. Considered one of the longest continually inns and taverns in not only Virginia but in the United States, it is still operating today as the Red Fox Inn and Tavern. A story and history that is certainly more than ordinary. So please plan to join us for this gala event and celebrate some of our industries best and brightest. VA-1, the Governor’s Conference on Tourism, kicks-off at the Hotel Roanoke on November 13 and will run through November 15. This year’s conference theme— Experience Virginia—will prove to be a one of a kind opportunity to experience all that Virginia has to offer. The main conference will open with the stars of DIY

Network’s hit show “Salvage Dawgs,” Robert Kulp and Mike Whiteside, discussing their experience travelling Virginia and filming the hit show from their Roanoke headquarters, and what the show has meant for Virginia tourism. Register now to make sure you have a seat at their event. Finally, our governmental affairs team and committee are preparing for the 2017 General Assembly session. Virginia ABC changes and Airbnb legislation are sure to be hot topics again this year. Mark your calendars for VRLTA’s Day on the Hill and Taste of Virginia reception on January 25 and 26, 2017. Join us for a fabulous reception on January 25 at the John Marshall Ballroom where you can mingle with elected officials and sample some of member restaurants finest fare and libations. Next

Northern Virginia, Director of Membership & Government Affairs Kristen Karrfalt kristen@vrlta.org

Director of Education & Workforce Development Jim Wilson jim@vrlta.org

Director of Marketing & Communications Seth Petersen seth@vrlta.org

Administrator Jenny Latina jenny@vrlta.org

morning it’s off to hit the Hill to keep our General Assembly members up to speed on our positions. Don’t forget to reach out to your elected officials at home. Remind them of what your business means to the industry. It’s important! Most importantly, don’t forget to spread the word to your friends in the industry about the Association and everything going on. VRLTA needs their membership and voices to be heard! Yours in hospitality,

Eric Terry, VRLTA President

Magazine Ad Sales Kendall Burns kendall@vgnet.com

VRLTA | 2101 Libbie Ave, Richmond, VA 23230 | (804) 288-3065 | www.VRLTA.org

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CONTENTS

7

CONTENTS

4 Letter From The President 8 College Hospitality + Tourism Management

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6 NEW MEMBERS 7 PROSTART 11 NEWS BRIEFS/UPDATES 13 FUTURE OF HOSPITALITY

14 5 REASONS

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RESTAURANT GROWTH WILL CONTINUE

16 AIRBNB UNREGULATED 17 WAGES & HOURS 18 A LOOK BACK

AT THE PAC

19 OUR PARTNERS 20 UPCOMING EVENTS

YOUR PARTNER IN FOODSERVICE EXCELLENCE. www.sysco.com

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NEW MEMBERS

NEW MEMBERS | SUPPLIERS

Haywood’s Lexington Mokomandy Sterling Portico Restaurant Richmond Rajput Indian Cuisine Suffolk Steam Bell Beer Works Richmond StudioBrew Bristol TAPS Lexington Tula’s Restaurant and Bar Washington Y Not Italian Cuisine Virginia Beach

Creative Technologies Fredericksburg Delaware North Richmond Expedia Washington, DC Grow Forward Solutions Harrisonburg Hidden Heritage Education Virginia Beach Patrice & Associates Sterling Satellite Solutions Chesterfield Squier Associates Rockville, MD

| RESTAURANTS/ BREWERIES

| LODGING 200 South Street Charlottesville Afton Mountain Bed and Breakfast Afton

Byrd’s Restaurant Newport News Chapman House Luray

Bay Haven Inn of Cape Charles Cape Charles Black Horse Inn Warrenton Channel Bass Inn Chincoteague Dinsmore House Inn Charlottesville Essex Inn Bed and Breakfast Tappahannock Fig Street Inn Cape Charles Fountain Hall Bed and Breakfast Culpeper Garden and Sea Inn New Church Holladay House Orange Inn at Monticello Charlottesville Inn at Old Virginia Staunton Iris Inn Bed and Breakfast Waynesboro Prospect Hill Plantation Inn Louisa

Residence Inn Potomac Mills Woodbridge The Ashby Inn and Restaurant Paris The Georges Inn Lexington The Governor House Inn Falls Church The Inn at 400 West High Charlottesville The Inn at Vineyards Crossing Hume The Virginia Cliffe Inn Glen Allen Waypoint House Bed and Breakfast Berryville

| TRAVEL Autobahn Indoor Speedway Manassas York County Tourism Yorktown

Your local source for foodservice products.

rfsdelivers.com • tracsdirect.com

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PROSTART

ProStart Students are Back in the Kitchen

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s 3,900 students across Virginia headed back into classrooms this fall, many others graduated the program and headed off to pursue higher education and careers. ProStart is a nationwide, two-year program that unites the classroom with the foodservice industry. It developes the best and brightest talent into tomorrow’s restaurant and foodservice industry leaders. In the program, students learn essential kitchen skills, including food safety and knife cuts, as well as important management lessons, such as menu development and marketing. The Virginia ProStart Student Invitational (scheduled for March 10, 2017 in Blacksburg) provides hands-on opportunity for students to demonstrate the skills they learned throughout the year and be judged by Virginia’s top industry professionals. The ProStart curriculum utilizes “The Foundations of Restaurant Management & Culinary Arts,” as well as ServSafe training programs, such as Food Handlers and Manager Training. To develop well-rounded skills that translate to the workplace, today’s learning experience incorporates culinary arts and management topics, as well as mentoring from top industry talent. Rewarding Experience — Become a Mentor Want to be a part of the ProStart program by enriching student education experiences and developing your future employees? Consider mentoring a ProStart student or classroom.

2016/2017 ProStart Events October 24-26, 2016 ProStart Teacher Training | Richmond December 9, 2016 ProStart Bootcamp | Norfolk March 10, 2017 Virginia ProStart Student Invitational | Blacksburg April 28-30, 2017 National ProStart Student Invitational | Charleston, SC

Virginia ProStart By The Numbers Students 3,900 Educators 75 Schools 55 Mentors 10

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COLLEGE HOSPITALITY + TOURISM MANAGEMENT

JMU Hospitality comes from the Hart Director: Michael J. O’Fallon, Ph.D. Enrolled Students: ~120 undergraduates

VIRGINIA’S HOSPITALITY STARTS WITH OUR STUDENTS Want to know where the future hospitality workforce will come from? Check out the latest happenings and updates from many of the Hospitality and Tourism Management programs from across the state. And look for more updates in the next issue from our Culinary Colleges!

Hokies in Hospitality Department Head: Nancy McGehee Ph.D. Enrolled Students: 275 undergraduates, 12 MSBA, 10 Ph.D. Even before the 2016-2017 school year began, Virginia Tech’s Hospitality and Tourism Management (HTM) program was off to an exciting start. During the summer, the HTM Department launched a brand new website (http://www.htm.pamplin.vt.edu/) and, as part of a campus-wide visibility campaign, placed an exterior ad on a BT (Blacksburg Transit) Bus. This fall, the Department also welcomes four new amazing faculty members, including new Professor of Practice, Mr. Gary Walton, former GM of the Hotel Roanoke and 30 year veteran with Hilton. Virginia Tech’s undergraduate Hospitality and Tourism Program, housed in the Pamplin College of Business, is an AACSB and nationally-ranked program. The graduate program offers a Ph.D. degree in Blacksburg as well as three unique certificates and two Master degrees on the Falls Church campus in the National Capital Region. The HTM field study program is considered the gold standard for student-industry engagement, and the job placement rates of our graduates is one of the highest on campus. Hokie Hospitality is thriving in Blacksburg, and our students continue to look for opportunities to connect with employers. If you have an internship or job opportunity and would like to be added to our Job Board send an email to htmdpt@vt.edu.

@vt_htmdept

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Although the hospitality program at James Madison University has been in existence since 1974, it wasn’t until June 2010 that it became a freestanding school. At that point in time, the Hospitality and Tourism Management program merged with the Sport and Recreation Management program, becoming what is now the Hart School of Hospitality, Sport and Recreation Management. After four years of solid education, our 480 students now earn a bachelor’s of science degree. Our students in the program are challenged on many different levels. First, they are challenged intellectually. Throughout their tenure at JMU, they will take 48 credit hours, 16 courses, of Hospitality Management related courses. Once they graduate, they will have taken courses in Leadership, Culinary Arts, Ethical Decision-Making, Human Resources, Lodging, Event Management, Cost Control, and Hospitality Finance, to name a few. In addition, they earn a Business Minor from the nationally acclaimed College of Business at JMU. Second, they will be challenged experientially. Although we offer practical, hands-on, experience in the classroom, we also have a 1,000-hour work requirement. This is completed through two courses, including a required 400-hour internship, prior to their senior year in the program. Their experience will be critical, as we combine theory and practice in all of our courses. Their work experience will not only assist with learning in the classroom, but will also give them an advantage when looking for a post-graduation job opportunity. In the fall of 2015, we became the Hart School; the first named program, school, or college in the history of James Madison University. This came about as a result of a long standing relationship with G.J. and Heather Hart. G.J. serves as Executive Chairman and CEO of California Pizza Kitchen. Through a generous endowment from the Harts, funding will be provided for student development. The gift will allow our students to take advantage of professional conferences and other off campus learning opportunities. @HartSchool_HM

@TheHartSchoolHM

@vthtm

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COLLEGE HOSPITALITY + TOURISM MANAGEMENT GMU Tourism Makes Top 20 US List TEM Leadership: Drs. Shawn Lee and Sue Slocum Enrolled Students: 200+ George Mason University’s Department of Tourism and Event Management (called HTEM) is gearing up for the new semester. With over 200 students majoring in our three concentrations (hospitality, tourism and event management), our program was ranked as one of the 20 Best Tourism Degree Programs in the United States by thebestschools.org. Under the new leadership of Dr. Shawn Lee and Dr. Sue Slocum, the TEM program is actively involved in both scholarly and community-based initiatives, working closely with Northern Virginia businesses and agencies. We have just formed a partnership with Marriott’s college recruitment team for their Voyage Global Leadership Development program and work closely with Carnival Cruise Lines to offer cruise ship management courses. We have worked with Crestline Hotels, Visit Loudoun, The National Mall, and Reston Association to provide industry research that improves operations and increases visitor satisfaction. We offer highly trained students to fulfill practicum and internships with local agencies. We are excited to host our third annual Career Social on March 7, 2017 which brings together nearly 40 businesses with our students and graduating seniors. If you are interested in participating in this year’s event or are interested in our program, please contact Sue Slocum at sslocum@gmu.edu. And don’t for get to check us out at https://rht.gmu.edu/srt. @MasonCEHD

@MasonCEHD

NOVA Celebrates 50 Years in Hospitality Education Associate Dean: Janet Sass, CHE, RDN Enrolled Students: 200+ The Hospitality Management at Northern Virginia Community College is celebrating 50 years of providing quality hospitality and tourism education to students from not only Virginia, but around the world. We offer a twoyear associate’s degree in applied science specializing in hospitality and one-year certificates in culinary arts and meeting planning. Our faculty are all seasoned industry professionals who left the excitement of operations to teach and help guide students into the right career pathway in hotels, restaurants, resorts and attractions so they can reach their personal and professional goals. Our program is working to provide career development planning, structured work-based learning opportunities, and job placement. We are working with high schools and industry to provide a high quality workforce for the hospitality industry. The program graduates about 35 students a year but our program has over 200 students attending classes. About half of those students are currently working in the industry. We are collaborating with George Mason University to support workforce development and provide students internships and training while students attend classes. NOVA hosted a high school “Pineapple Bootcamp” this summer that attracted 24 high school students and gave them a full day of orientation to the hospitality industry and the many job opportunities this career path offers. This fall, along with George Mason, a group of hospitality students will spend a day at the Dulles Marriott exploring the daily operations of a hotel with the opportunity to meet with departments heads to learn about their operations. A freshman student, Sara Louizi, was also the fortunate recipient of a scholarship award from VRLTA this summer. Sara works at Embassy Suites in Arlington and juggles family, work and school. This is always challenging, but Sara is an outstanding student and dedicated hospitality professional. We are looking forward to an exciting year ahead and hope to build a stronger bridge with industry through workforce development, student internships and professional development. @NOVAaccess

@NOVAaccess

Hospitality Leadership at Virginia State University Interim Chair: Berkita S. Bradford Ph.D. Enrolled Students: ~100 undergraduates The Hospitality Management Department at Virginia State University (VSU) is designed to prepare students for a wide variety of career opportunities in the fast-growing, global hospitality and tourism industry. The focus of the program at VSU is the development of managerial and leadership skills essential to all hospitality managers, with rigorous coursework in management of hotels and restaurants, travel tourism, recreation, retail, convention and event planning. The available degree options are comprehensive (general) restaurant management and lodging. Students pursuing the restaurant management and culinary concentration gain valuable hands-on experience in the student-run M&M restaurant located on campus. In addition to traditional classroom lectures, students participate in laboratory experiences and are required to complete three supervised internships. Current and past students have completed these internships at leading hospitality companies throughout the United States, China, and Europe. The Hospitality Management Program at VSU is proud to be accredited by the Accreditation Commission for Programs in Hospitality Administration (ACPHA), one of only five Historically Black Colleges and Universities (HBCUs) programs accredited by ACPHA. The program is facilitated by four full-time faculty members: Drs. Berkita S. Bradford, Michelle Mosely, Yan Zhong (Grace), and Chef Jeffery Chapman (Chef Instructor). @VSUHMGT

@VsuCollegeOfAgriculture W W W. V R LT A . O R G

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WELCOME

From Fresh Meat and Seafood to Local Produce, we are proud to be Virginia’s hometown foodservice distributor since 1885.

Everything we do is to serve the people on the front lines of foodservice. This means helping you to find the best products, sourcing our own exclusive brands, and offering custom services that bring you the freshest meats, produce, and seafood. It also means bringing you technology innovations so you can place orders easily and stay on top of your operation wherever you go. We aren’t just in the delivery business; we’re in the success business. We do everything we can to help each of our customers become a crazy, line-out-the-door hit. For more information, visit PerformanceFoodservice.com/Virginia today. 10

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:26 PM

NEWS BRIEFS & UPDATES Fairfax-Dulles Chapter

VRLTA

News Briefs & Chapter Highlights Fairfax Meals Tax Updates

NO FAIRFAX

FOOD TAX

All Fairfax County residents will vote on whether or not they would like to see the additional 4% food tax on November 8th. The coalition made up of restaurants, hotels, and other area organizations has recently retained a firm to manage the campaign through election day to help educate the public on how it adversely affects our industry and others. Early polling results conducted by the retained campaign firm, suggests a majority of likely voters are not in favor of a Meals Tax increase. If you would like to become more involved, you can do so via www.stopthefoodtax.com and follow other updates on Facebook and Twitter.

Since April, David Earp of Gordon Biersch has successfully lead our Fairfax-Dulles Chapter. We now bid him farewell as he moves on to his next adventure in Florida. We are pleased to announce Gary Cohen, Vice President of Operations for Glory Days Grill will assume the role of President and continue to chair the chapter’s Political Action Committee. Our other committee chairs include Janet Sass, Assistant Dean of Northern Virginia Community College’s Hospitality Department, and Chris Burns, President of Old Ox Brewery. Janet will be leading our Education & Workforce Development Committee and Chris Burns will be overseeing the chapter’s Membership & Events Committee. If you are interested in becoming more involved on any of the chapter committees, please contact Kristen Karrfalt at kristen@vrlta.org and she can connect you with the appropriate committee chair. A complete list of board members is listed on the Fairfax-Dulles Chapter page on the website—VRLTA.org/group/Fairfax-Dulles. Next Chapter Board Meeting Date: Friday, October 14th Location: Visit Fairfax Office Time: 3:00 – 4:30 PM

FY’17 GSA Per Diem Rates Announced On Friday, August 12th, the General Services Administration’s (GSA) announced its Per Diem Rates for FY 2017, effective October 1, 2016. The standard continental United States (CONUS) rate increased from $89 per night to $91. There were no new NSAs for FY2017 and three locations that were NSAs in FY2016 will move into the standard CONUS category. None of these three areas are in Virginia. However, last year’s Per Diem did see Fredericksburg, Norfolk/ Portsmouth, and Prince William/Manassas move from NSA rates to the CONUS rate.

Helpful Definitions CONUS: Standard Rate for lower 48 Continental United States NSAs: Non-Standard Areas for which a higher Per Diem Rate is established

The average rate increase over FY 2016, for the 12 Virginia localities (including those in the DC market) with NSA status for FY 2017, is 4.68%, or $6.04. For a complete list of the Rates, visit VRLTA.org/News. W W W. V R LT A . O R G

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NEWS BRIEFS & UPDATES Greater Prince William Chapter

The Greater Prince William Chapter held its first board meeting on Wednesday, August 17th. Chapter President, Charles Friend hosted the meeting and a membership mixer at the Homewood Suites Woodbridge. Future chapter board meetings and membership events will be held quarterly. Stay tuned as we update our chapter page with a complete list of board members, committee chairs and upcoming event dates. If you are interested in becoming more involved, please contact Kristen Karrfalt at kristen@vrlta.org for additional information or visit the Chapter page on the website—VRLTA.org/group/ GreaterPW. Next Chapter Board Meeting & Mixer Date: Wednesday, November 9th Location: TBD Time: Board Meeting 3:00 – 4:30 PM; Mixer 5:00 – 7:00 PM

Norfolk Region Chapter

Airbnb Housing Commission Moves Toward Recommendation

The workgroup that was developed to create a final recommendation for legislation which is to be considered during the 2017 Session, has now met three times. With the most recent meeting on Thursday, August 25th. At the August 25 meeting, information was presented on insurance liabilities, Virginia’s B&B community, and—following up on the July 14 workgroup meeting—Northern Virginia’s perspective. This point of view was delivered from Visit Loudoun’s Beth Erickson, who was speaking for not only the tourism entity, but on behalf of the County’s government officials and the Northern Virginia Visitors Consortium. Most striking was Erickson’s case study on “Sabrina,” an Airbnb “superhost” who, by Erickson’s account, has made more than $120,000 on a single property (she has a least two listed) using the site, all while violating Loudoun’s Zoning Ordinance. The Independent Insurance Agents of Virginia noted that, while Airbnb’s unpublished Liability Policy appeared solid, they would still highly recommend additional coverage. Not all platforms have this policy and frequently referred to Hosts as running a business. With more and more cities around the state (e.g., Virginia Beach,) approving their own, tighter regulations on short-term online rental providers, there seems no better time than now for Virginia to become model legislation on this unfettered and uncontrolled marketplace.

Virginia ABC Regulations Under Review

Chapter President, Lee Severino, has relocated to San Diego to be closer to his family. John Whippen, Chapter Vice President, who would be next in line to fulfill the two-year term, accepted the interim Chair position at VisitNorfolk. With these new responsibilities, John has requested to remain as Vice President of the VRLTA Norfolk Region Chapter and recommended that Tim Peters return to serve as the interim Chapter President to complete the first year of Lee’s two-year term. We thank Tim for agreeing to serve in this capacity. Stay up-todate at VRLTA.org/group/Norfolk. Next Chapter Board Meeting Date: Tuesday, October 11th Location: TBD Time: 11:00 AM – 12:00 PM

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VRLTA and its members, along with the ‘Fix the Mix’ coalition, continue to work with the Special Joint Subcommittee of the House Committee on General Laws and the Senate Committee on Rehabilitation and Social Services Studying Certain Alcoholic Beverage Control (ABC) laws. They are to develop a recommendation to present to the 2017 General Assembly regarding the Mixed-Beverage Ratio. In August, the Subcommittee released a list of 12 “Alternatives’ to the current Mixed-Beverage Ratio (45%) for Public and Industry Comment. At the time of publication, VRLTA was in the process of surveying the industry to create a collective recommendation on the proposed alternatives. Stay current with these efforts at VRLTA.org.

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Kyla Barrett

Anthony Russell

Jamyce Freeman Elizabeth Sauter

Delaney Edwards

FUTURE OF HOSPITALITY

The Future of Hospitality Virginia Restaurant, Lodging & Travel Association Education Foundation Awards Scholarships to Ten Virginia Students

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he Virginia Restaurant, Lodging & Travel Association Education Foundation (VRLTAEF), in partnership with the National Restaurant Association Education Foundation (NRAEF), has distributed $11,500 in scholarship awards to ten Virginia students. They include six first-year collegians, one second-year, two third-year, and one fourth-year. The annual grants are provided to students that reside in Virginia and who have shown a passion for and commitment to the foodservice and/or hospitality industries and intend to pursue or continue higher education opportunities in those fields. “Congratulations to all of our Award Recipients,” said VRLTA Director of Education & Workforce Development, Jim Wilson. “The future of Virginia’s restaurant and hospitality industry is today’s students. We wish them the best of luck and look forward to seeing what they accomplish next.” In the last two years VRLTAEF, which receives near dollar-for-dollar-matching from the NRAEF, has awarded $23,000 in scholarships to 18 students.

2016 Scholarship Recipients • Kerry Callender from Hampton, Virginia, who is entering her third year at the Culinary Institute of Virginia (CIV) studying Foodservice Management. • Delaney Edwards from Abingdon, Virginia, who is entering her first year at Virginia Tech studying Hospitality & Tourism Management. • Ana Flores from North Chesterfield, Virginia, who is entering her first year at Johnson & Wales University studying Culinary Arts. • Jamyce Freeman from Chesapeake, Virginia, who is entering her first year at the CIV studying Culinary Arts. • Kyla Lord-Barrett from Richmond, Virginia, who is entering her first year at the Culinary Institute of America (CIA) studying Culinary Arts. • Sara Louizi from Alexandria, Virginia, who is entering her second year at the Northern Virginia Community College studying Hospitality Management. • Daniel Pinard from Salem, Virginia, who is entering his fourth year at Virginia Tech studying Hospitality & Tourism Management. • Anthony Russell from Colonial Heights, Virginia, who is entering his first year at Liberty University studying Nutrition. • Elizabeth Sauter from Chesapeake, Virginia, who is entering her third year at George Mason University studying Hospitality Management. • Jordan Whorley from Dillwyn, Virginia who is entering her first year at Piedmont Virginia Community College studying Culinary Arts. W W W. V R LT A . O R G

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PROSTART

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5 REASONS RESTAURANT GROWTH WILL CONTINUE

REASONS RESTAURANT GROWTH WILL CONTINUE

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oncerns of a “restaurant recession” are largely misplaced, and industry growth will likely continue in the months ahead, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper. Recent concerns of a “restaurant recession” are largely misplaced. Just as economists wouldn’t say the overall economy was in a recession if just a few sectors were struggling, the same shouldn’t be said about the restaurant industry based on the results of a handful of companies. While same-store sales and customer traffic trends were certainly a mixed bag in recent months, that doesn’t paint a complete picture on the health of the overall restaurant industry. A better performance metric is total restaurant industry sales, which includes both existing restaurant sales as well as sales at new restaurants that enter the market. By this measure, the restaurant industry remains on a positive trajectory. According to data from the U.S. Census Bureau, total eating and drinking place sales were up 6.0

percent on year-to-date basis through July 2016. Adjusting for menu-price inflation, sales were up about 3.3 percent during the first seven months of the year. This real growth rate is right in line with the average annual gains registered during the last five years, which suggests the restaurant industry expansion is maintaining its post-recession track. That’s not to say that consumers aren’t somewhat unsettled, and a chunk of that uncertainly could likely be traced to the vitriol coming from the U.S. presidential campaign. In fact, 31 percent of adults say they have become less confident about their personal spending as a result of the presidential campaign during the last few months, according to a new national survey conducted August 18-21 by ORC International for the National Restaurant Association. Fourteen percent say they are more confident, while 55 percent say it hasn’t impacted their personal spending. However, thanks to the resilient American consumer, the overall restaurant industry is growing. Here are five reasons why the expansion will continue in the months ahead:

Courtesy of the National Restaurant Association. To read this article as it was originally published visit www.Restaurant.org or http://goo.gl/YlQg6P.

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1

Labor Market Remains Healthy

The number-one driver of restaurant sales is a healthy labor market. When people are employed, they have both the income to support spending as well as the daily need for the convenient food and beverage options that the restaurant industry provides. While the current economic expansion has generally lacked explosiveness, it has been remarkably consistent, with gains of at least 2.1 million jobs each year since the end of the Great Recession. Job growth is on a similar pace in 2016, including the addition of more than a half-million jobs during the last two months alone. The restaurant industry has never contracted without a corresponding decline in the labor market, and there are currently no indications that job losses are on the horizon.

2

Wage Growth is Picking Up

Although wage growth has been noticeably stagnant during the current expansion, there are signs that it is finally starting to pick up. According to the Bureau of Labor Statistics (BLS), the average hourly earnings for all private sector employees rose 2.6 percent between July 2015 and July 2016. This matched the strongest 12-month wage growth during the economic recovery, though it was still below the mid-three-percent gains posted before the recession. Other factors should lead to stronger wage growth in the months ahead. As the economy moves toward full employment and the jobless rate drops, businesses typically have to compete harder for talent in a shrinking labor pool. A healthy labor market also gives workers the confidence and ability to leave one job for a higher paying job somewhere else. According to BLS data, an average of 2.3 percent of private sector workers quit their jobs each month during the first half of 2016. This represented the highest half-year quit rate since 2007. If wages continue to rise and inflation remains modest as expected, consumers will have more disposable income to support additional discretionary spending.

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5 REASONS RESTAURANT GROWTH WILL CONTINUE

Households Have Some Breathing Room

Household debt is rising steadily. Total revolving credit balances are approaching $1 trillion for the first time since 2008, according to data from the Federal Reserve. However, a key difference between now and eight years ago is the fact that households are much more equipped to handle this level of debt. The Federal Reserve’s Financial Obligations Ratio, which is the ratio of total required household debt payments (plus rent on primary residences, auto lease payments, insurance and property tax payments) to total disposable income, is nearly three points below 2008 levels and hovering near an all-time record low. Households are also building up a financial cushion, with savings rates in recent months roughly double what they were just prior to the Great Recession. Consumers also continue to benefit from relatively low gas prices, as well as grocery store prices that are on pace to decline for the first time since 1967. These all put additional disposable income in the pockets of consumers. Many consumers are also benefiting from rising wealth, which has a positive impact on spending. House prices are trending higher, and all three major U.S. stock indices have closed at record highs during August.

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Pent-up Demand Remains Elevated

Although overall sales are trending higher, consumers have yet to get their fill of restaurants. According to a national survey conducted in April 2016 by ORC International for the National Restaurant Association, 45 percent of adults say they are not eating on the premises of restaurants as frequently as they would like. Similarly, 46 percent of consumers say they are not purchasing takeout or delivery as often as they would like. Not surprisingly, pent-up demand is higher among lower-income households, as six in 10 consumers in households with income below $35,000 say they would like to be using restaurants more frequently. However, fully one in four adults living in households with income above $100,000 also say they are not patronizing restaurants as often as they would like. As households with income above $100,000 are responsible for four in ten dollars spent in restaurants, any degree of unfulfilled demand is an encouraging sign for the industry in the months ahead. While there is always some degree of unfulfilled demand for restaurants, the current levels are well above historical norms. In the mid-2000s, only about one in four adults said they weren’t eating at restaurants as often as they would like – or just over half of the level that exists today.

5

Consumers Crave Experiences

In the aftermath of the Great Recession, consumers became very selective in their spending habits, which resulted in some sectors doing much better than others. One of the reasons why the restaurant industry held up relatively well during a challenging economic environment has been a shift in consumers’ spending habits toward experiences. When given the choice of how they would spend an additional $100 if they had it, more than four in ten adults say they would spend it on an experience such as a restaurant or other activity. Fifty-eight percent say they would be more likely to purchase an item from a store. Among consumers in households with income above $75,000, one-half say they would be more likely to spend their extra $100 on an experience.

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9/9/16 1:49 PM


AIRBNB UNREGULATED

AIRBNB’S UNREGULATED COMMERCIAL ACTIVITY

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“PHOENIX, LOS ANGELES, CHICAGO, MIAMI, BOSTON, AND NEW YORK ALL SHOW A SIGNIFICANT AND GROWING PORTION OF AIRBNB’S REVENUE IS DERIVED FROM ILLEGAL HOTELS.”

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ore than seven months have passed since Airbnb issued its “community compact,” in which the company claimed it would do everything it could to “help ensure our community pays its fair share of hotel and tourist taxes, build an open and transparent community, and promote responsible home sharing to make cities stronger.” Unfortunately, those objectives have yet to bear fruit. In reality, a significant—and rapidly growing—portion of Airbnb’s revenue in major U.S. cities is driven by commercial operators who often buy up multiple residential properties to rent out in the same metropolitan area or list units available on a full-time basis, just like a hotel. What’s worse, Airbnb is not being transparent with its data and or acting as the true partner it has vowed to be with government officials to help create safe environments for its users and the communities in which it operates. While the company, valued at some $25 billion, has a reported 2 million listings worldwide and suggests that its hosts largely use the platform to supplement their income, Airbnb fails to deal with the true picture of what is happening on its platform or release data that provides a complete look at its operations. In order to get a better picture, we commissioned our own data. We know from the comprehensive, national analysis released in January by Dr. John O’Neill, professor of hospitality management and director of the Center for Hospitality Real Estate Strategy in the School of Hospitality Management at Penn State University, that the number of individuals listing two or more residential properties for rent on Airbnb is rapidly growing and 40 percent of the company’s revenue in those cities is generated by these multi-unit operators—to the tune of half a billion dollars a year. What’s more, nearly 26 percent 16

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of Airbnb’s revenue in 14 of the nation’s largest cities came from users who listed properties for rent full time (360 days or more each year). Following the January release of this national data, we have done deeper dives into each of those cities. Those analyses illustrate the same trends of commercial activity. Phoenix, Los Angeles, Chicago, Miami, Boston, and New York all show a significant and growing portion of Airbnb’s revenue is derived from illegal hotels. The trend is clear: Persistently, from zip code to zip code and city to city, unregulated commercial operators are exploiting an illegal hotel loophole to run businesses without abiding by safety and security regulations or taxation and zoning laws. Airbnb is misleading the public when it says it’s providing means for people to share their residence and make some extra income. That’s home sharing, and it’s a practice that has been going on for decades and one AH&LA supports. But when commercial operators are running illegal hotels by skirting safety and security standards, dodging tax obligations, flouting zoning regulations, and avoiding appropriate levels of insurance, it’s no surprise that Airbnb urges “voluntary collection agreements” with cities and states to try and avoid further scrutiny and regulation. To date, Airbnb has signed such agreements with roughly 150 cities to collect and remit local transient occupancy taxes from its hosts, yet all contain strict clauses that require only anonymized self-reporting of data, which ties the hands of local officials from being able to truly enforce the laws on the books or contemplate new measures to rein in illegal hotels. As communities become increasingly aware of this growing problem, it is clear the negative impacts of illegal hotels and the short-term rental companies that facilitate these activities cannot be ignored.

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We are encouraged by the many diverse voices who are joining the chorus to take action. Local organizations and city leaders are urging state and local officials to create and enforce sensible rules that protect communities and the traveling public. From Santa Monica to Los Angeles to Chicago to Seattle, we’ve already seen policymakers take steps to tackle this issue through proposed short-term rental ordinances. These proposals are a step in the right direction and depict the scope of this problem nationwide, but much more needs to be done. As we move ahead and continue to analyze and release additional data in more of our country’s major metropolitan areas, we look forward to working with city and state officials. We must ensure that any ordinance on this issue include strong provisions to rein in commercial operators from operating unchecked illegal hotels and strong enforcement mechanisms to ensure that the rules on the books are followed. The bottom line is that the longer companies like Airbnb, and the illegal hotels they facilitate, are left unchecked, the longer communities will fall victim to unregulated commercial landlords who disrupt neighborhoods, fail to abide by safety and security measures, and do not contribute their fair share of taxes. AH&LA will continue to advance a fact-driven discussion with affordable housing advocates, neighborhood watch activists, disability groups, and other coalition partners as well as public officials across the country. It is important for us to get this right—it’s in the best interest of our neighborhoods and communities. Courtesy of Lodging Magazine. To read this article as it was originally published visit www.LodgingMagazine.com or http://goo.gl/1Jf0J7.

Fall 2016

9/9/16 1:36 PM


WAGE & HOUR

WAGE AND HOUR ISSUES FOR TIPPED EMPLOYEES By Anne G. Bibeau, Esq. Vandeventer Black LLP

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usiness owners often don’t give the Fair Labor Standards Act (FLSA) any thought until they are served with an FLSA lawsuit or the U.S. Department of Labor (DOL) pays a visit. Although the law has been around for longer than most businesses (since 1938), employers still struggle to understand their obligations. Mistakes are common, and plaintiffs’ attorneys are poised to exploit them. FLSA litigation has been on the rise, with eight straight years of increased lawsuit filings. Hotels and restaurants are particularly vulnerable because of their large numbers of tipped staff. The following issues are frequently a target for FLSA litigation and DOL investigations in the hospitality industry:

• Are you calculating overtime correctly? Businesses must pay all non-exempt employees at least the federal minimum wage (currently $7.25 per hour), plus overtime at the rate of 150% the employee’s regular hourly rate for all hours worked in excess of 40 in any given week. For tipped employees, the employer is permitted to take a tip credit toward the minimum wage; the employer must pay at least $2.13 per hour in direct wages, with a maximum tip credit of $5.12 per hour. For example, if a hotel pays a bellhop $2.13 per hour in direct wages, claiming the maximum tip credit of $5.12 per hour, and the bellhop works 50 hours in a particular week, the hotel should calculate his wages as follows: • $2.13 (direct wages) x 50 hours = $106.50 direct wages before overtime premium • $7.25 (regular rate of pay) x .5 (overtime premium rate) x 10 hours = $36.25 overtime premium • Total wages owed = $106.50 + $36.25 = $142.75 • Do you give tipped employees the proper notice regarding the tip credit? In order to take the tip credit, the employer must provide specific notice to tipped employees regarding their rights and tip credit requirements. If the employer cannot prove that each tipped employee received the notice, the employer will be denied the tip credit and will have to make up the difference in straight time and overtime wages. The best practice is to prepare a comprehensive notice (the DOL doesn’t provide one) and post and distribute it to tipped employees, keeping a signed receipt from each employee.

• Are your tipped employees earning enough tips to cover the tip credit? If not, you cannot take the tip credit. You need to track the tips your employees receive so that you can prove you’ve met this requirement. • Do you add a service charge or fixed gratuity to your customers’ bills? Many restaurants add a compulsory charge, such as a fixed “service” or “gratuity” charge, to customers’ bills, particularly for large parties or events. Those compulsory charges are not tips, even if you distribute them to the wait staff. If you do distribute those compulsory charges to the wait staff, that will increase the wait staff’s regular rate of pay, thereby increasing the amount of overtime premium they will be due for any overtime worked that week. • Who’s in the tip pool? If you have a tip pool, only tipped employees can participate. If employees who do not regularly and customarily receive tips – such as chefs, dishwashers, janitors, and managers – get to take a dip in the tip pool, or if any of the tips go to the business itself, the tip pool will be deemed invalid. Also, if you’re using a tip pool, there are specific notices you must give employees regarding the pool. • What else are your servers and valets doing? The tip credit is only available for tipped work. If tipped employees perform other, non-tipped work (such as cleaning or cooking), you need to make sure that those non-tipped duties do not exceed 20% of the employee’s workweek. • Do you deduct credit card charges from your employees’ tips? Credit card companies take a bite out of each transaction, and it’s permissible

to deduct the same percentage from the tips customers charge. For example, if Visa charges you 2% on each charge, you can deduct 2% from the tip portion of the charge that you pass on to the waitress. You should not deduct more than Visa does, and you must make sure that the deduction does not reduce the waitress’s wages below the minimum wage and that she’s receiving sufficient tips to cover the tip credit. Also, you must pay her tips by the next regular pay day, even if Visa takes longer to process the charge. • Who pays for uniforms and broken dishes? You can’t make deductions from an employee’s wages that reduce the wages to below the minimum wage. Also, in Virginia, there are strict rules about what can be deducted from an employee’s wages and in what circumstances. The best practice to reduce FLSA liability is to develop appropriate policies and procedures, train your employees and their supervisors on those policies and procedures, and document everything: training and notices, tips, hours worked, etc. You should audit your wage and hour practices frequently – at least annually – to ensure that problems are identified and corrected quickly. Frequent audits are critical, even if you use a payroll service, because ultimately the business itself and possibly its owners and managers will be held liable for any mistakes. Finally, do not underestimate the task before you; you need legal counsel knowledgeable in the FLSA to assist you. If it were simple, there would be no FLSA litigation.

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VRLTA POLITICAL ACTION COMMITTEE

A Look Back at the PAC A

s you can see from the letter here, presumably from the late 80s or early 90s, Virginia’s Hospitality Political Action Committee has been a large part of the General Assembly. The funds collected into this PAC went a long with to ensure that pro­hospitality (restaurant at the time) Legislators were elected into office. Today, more than ever, the VRLTA PAC exists to ensure the rights and success of the Commonwealth’s restaurant and hospitality industry. As the second to last paragraph of the letter states, “We must also make a special effort this year to raise our PAC funds early. A political candidate not only measures how much you give but how early you give it. TO MAKE A DONATION TO THE VRLTA PAC, VISIT VRLTA.ORG/DONATIONS!

RESTAURANTS

O N E S T R O N G V O I C E for T O U R I S M

Show your

Formerly Virginia Hospitality & Travel Association (VHTA)

Virginia Restaurant, Lodging & Travel Association PAC

2101 Libbie Avenue • Richmond, Virginia 23230

LODGING

Phone: 804-288-3065 | FAX: 804-285-3093 E-mail: PAC@VRLTA.org | www.VRLTA.org

SUPPORT for the

VRLTA PAC

TRAVEL DESTINATIONS IMAGE CREDITS: C O V E R P H O T O O F R O A N O K E VA L L E Y: J O H N H E N L E Y. C O U R T E S Y V I R G I N I A T O U R I S M C O R P O R A T I O N B E A C H P H O T O : J O H N H E N L E Y. C O U R T E S Y V I R G I N I A T O U R I S M C O R P O R A T I O N R E S TA U R A N T P H O T O : R U T H E R F O R D S T U D I O S . B O A R ’ S H E A D I N N . V I R G I N I A T O U R I S M C O R P O R A T I O N . L O D G I N G P H O T O : O M N I H O M E S T E A D R E S O R T. V I R G I N I A T O U R I S M C O R P O R A T I O N . T R A V E L D E S T I N A T I O N S P H O T O : K I N G S D O M I N I O N .V I R G I N I A T O U R I S M C O R P O R A T I O N

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Fall 2016

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PARTNERS PLATINUM

SILVER HEARTLAND HEARTLANDPAYMENTSYSTEMS.COM

Heartland Payment Systems is an endorsed partner of VRLTA and the NRA. Heartland offers a complete suite of services, including card processing, payroll services, tip & check management, and gift marketing. With Heartland, restaurants and hotels can reduce expenses, enhance & improve operations, and increase profitability. Angela Ihry • (P) 605.940.9861 • (E) angela.ihry@e-hps.com

SYSCO VIRGINIA & SYSCO HAMPTON ROADS SYSCO.COM

Along with top quality ingredients, all of our products are proudly backed by the highest quality assurance demanded by Sysco. Our dedicated associates and foodservice experts can explain how easy it is to do business with Sysco. Jason McGuire • (P) 757.855.4097 • mcquire.jason@shr.sysco.com

GOLD

ECOLAB ECOLAB.COM

Around the world businesses in foodservice, food processing and hospitality choose Ecolab products and services to keep their environment clean and safe, operate efficiently and achieve sustainability goals. Katherine Hunt • (P) 240.629.9410 • (E) Katherine.hunt@ecolab.com

Better hiring tools, right at your fingertips. Snagajob and VRLTA FPISpartner to give your hiring an edge. FPIS.COM

FPIS is the southeast’s premier brochure distribution service. They can help you buildyou’re an audience and awareness without spending the time and Whether looking for servers, cooks, energy doing it yourself. housekeeping, front desk, maintenance and Linda Higgins • (P) 407.656.8818 • (E) lindah@fpis.com

more, you can find them fast with Snagajob. You’ll get more applications, better applicants and a streamlined hiring process—saving you time and money. Post jobs, track applications and manage your new hires, all in one place. SIL INSURANCE

VRLTA.ORG/SIL

CAPITAL ONE CAPITALONE.COM

Capital One has partnered with VRLTA to make securing a small business loan simple. Whether it’s new computers, debt consolidation or a new space, Capital One has a loan or line of credit that can help take your business to the next level. Geeta Anand • (P) 703.896.0916 • (E) geeta.anand@capitalone.com

COMCAST BUSINESS VRLTA.ORG/COMCAST

Comcast Business can save you money on your tv, internet, and phone services. VRLTA’s dedicated sales representative will work directly with you to improve your telecom solutions and lower costs. Denise Davis • (P) 703.789.9304 • E) denise_davis@cable.comcast.com

PERFORMANCE FOODSERVICE - VIRGINIA

WWW.PERFORMANCEFOODSERVICE.COM Performance Foodservice delivers more than 125,000 food and food-related products to 85,000 customer locations on a daily basis from distribution centers nationwide. Everything we do is to serve the people on the front lines of foodservice. This means helping you to find the best products and services featuring custom-cut meat, produce, and local seafood. It also means bringing you technology innovations so you can place orders easily and stay on top of your operation wherever you go. Andrew Baserap • (P) 804.237.1001 • (E) Andrew.Baserap@pfgc.com

REINHART FOODSERVICE RFSDELIVERS.COM

Reinhart Foodservice is the 4th largest foodservice distributor in the country, serving independent restaurants, delis, sporting venues, schools, nursing homes, hospitals, the military and chain accounts. Our customers benefit from one-­stop shopping, as we offer a vast array of products to suit operators’ needs, like fresh meat, seafood, produce, dairy, coffee, dry groceries, china, utensils, disposables, foodservice equipment and more. John Ehehalt • (P) 757-538-8000 • (E) jgehehalt@rfsdelivers.com

SILVRLTA Insurance offers yousave expert10%. advice, leveraged pricing, fast service, & members flexible solutions for workers compensation insurance and more. Members Visit snagajob.com/vrlta today. can often save up to 25% on workers compensation premiums. Derek Lynch • (P) 804.888.7216 • (E) dlynch@silinsurance.com

SNAGAJOB LEARN.SNAGAJOB.COM/VRLTA

Snagajob is America’s #1 spot for hourly employment. Posting your jobs on Snagajob.com gives you access to over 60 million job seekers, most of whom don’t visit other job sites. Millennials love applying using our mobile­ friendly website and app. Hiring managers value Snagajob’s paperless application and new hire paperwork process, which makes it easy to quickly identify and hire quality workers. Now partnered with the Virginia Restaurant, Lodging & Travel Association, Snagajob is proud to offer preferred pricing, including a 10% discount for VRLTA members. Joe Gabriel • (P) 703.457.7873 • (E) joe.gabriel@snagajob.com

OTHER MONEY-SAVING PROGRAMS FISHBOWL VRLTA.ORG/FISHBOWL

Fishbowl is the leading online marketing solution for the restaurant industry, and a great option for small and independent hotels. If you need email marketing, social media management, reputation monitoring or full­service­ online marketing, Fishbowl has it covered. As a VRLTA member, you’re eligible for a free local email marketing account with 500 free monthly messages, 10% off list price thereafter, and more.

OFFICE DEPOT VRLTA.ORG/OFFICEDEPOT

Office Depot and OfficeMax offer you up to 80% off office supplies, both in­store & online. You’ll receive next day delivery on orders over $50. Plus, you can get an additional 15% off your first online order using coupons. To get all these benefits and more, just register online using company tracking code 0337. W W W. V R LT A . O R G

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MARK YOUR CALENDAR

UPCOMING EVENTS AND DATES 2015

2016/2017

October 7 Government Affairs Monthly Update October 11 Norfolk Region Chapter Board Meeting October 14 Fairfax-Dulles Chapter Board Meeting Visit Fairfax Office October 24 Ordinary Awards Dinner Richmond

2016

MORE INFORMATION ABOUT THESE EVENTS CAN BE FOUND AT WWW.VRLTA.ORG

October 24-26 ProStart Teacher Training Richmond October 24-25 VRLTA Fall Member Meeting Richmond November 4 Government Affairs Monthly Update November 9 Greater Prince William Chapter Board Meeting + Mixer November 13–15 2016 VA-1 Tourism Summit Roanoke December 9 ProStart Bootcamp Norfolk January 25-26, 2017 Day on the Hill + Taste of Virginia Reception Richmond March 10, 2017 Virginia ProStart Student Invitational Blacksburg

Upcoming ServSafe Classes October 11 — Richmond • Midlothian October 17 — Suffolk November 7 — Suffolk November 15 — Richmond • Downtown November 28 — Virginia Beach December 8 — Harrisonburg December 12 — Suffolk December 13 — Fredericksburg December 15 — Woodbridge December 19 — Ashburn

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Fall 2016

9/9/16 12:57 PM


Better hiring tools, right at your fingertips. Snagajob and VRLTA partner to give your hiring an edge. Whether you’re looking for servers, cooks, housekeeping, front desk, maintenance and more, you can find them fast with Snagajob. You’ll get more applications, better applicants and a streamlined hiring process—saving you time and money. Post jobs, track applications and manage your new hires, all in one place. VRLTA members save 10%. Visit snagajob.com/vrlta today.

W W W. V R LT A . O R G

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CHECK OUT ONE OF OUR NEWEST PRODUCTS: Cutting Edge Solutions from Sysco offers a fresh assortment of on-trend and innovative products that will lead to new inspirations and solutions. They are the very best value without compromising quality, helping restaurants stay ahead of trends in a competitive market. Contact your local Sysco marketing associate for more information!

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w e k S ich

Salmon Sliders Un i que

Bis cuit

Opt ion

! www.sysco.com

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2101 LIBBIE AVE., RICHMOND, VA 23230

BE FEATURED IN THE EXCITING NEW VIRGINIA GUIDE APP FROM THE VIRGINIA RESTAURANT, LODGING & TRAVEL ASSOCIATION.

User-friendly mobile app. Filtered by region from the Heart of Appalachia to the Eastern Shore.

Navigate easily through places to Eat, Play and Stay

Businesses easily found by region

VRLTA HOUSE AD

Maps business location relative to the user’s current location. Filters to distinguish Hotel icons, Dining icons and Activity icons.

Download today!

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Businesses are quickly accessed and described with the capability to call, locate, map or view their website.

VIRGINIA RESTARAUNT, LODGING & TRAVEL ASSOCIATION 2015 Free listing for all VRLTA members.Fall Upgraded and featured listings available.

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To ensure your listing contact: Kiara Davis 757-422-8979 ext 125 or at kiara@vgnet.com

9/13/16 11:41 AM


Virginia Restaurant, Lodging & Travel Association Fall 2016