As the country starts to reopen, one thing is clear: gone are the days of packed happy hours and large group dining experiences. Enter the era of social distancing pool noodle hats and American restaurants having to expand outdoor seating and reduce capacity.
As of last Friday, at least 15 states had issued requirements for restaurants to reduce capacity 25 to 50 percent in order to reopen. A study of New York City restaurants shows 61 percent would permanently close if capacity limits are below 70 percent.
The restaurant industry was hit hard and fast by the pandemic. By the end of March three million restaurant employees were out of work and the industry had lost $25 billion in sales. Grub Street, described the industry’s situation: “With no money coming in, there is no way to support workers, to pay rent, to pay taxes, or to pay bills. Yet now, more than two months into the government-mandated restaurant and bar shutdown, any kind of real ‘help’ seems even less likely to arrive than it did at the outset.”
Before COVID-19, Americans loved to eat out. Whether going to a restaurant, ordering take-out, meal delivery, or visiting a drive-through, 56 percent of Americans said they ate out two to three times a week. In 2019, sales at eating and drinking establishments were up by 4 percent from the previous year and the National Restaurant Association projected 2020 sales to be $899 billion. As states and cities implemented stay-at-home orders in response to COVID-19, Americans were forced to abandon their eating out habits. John Cywinski, the president of Applebee’s, declared, “This business model is fundamentally altered. There will be a likely contraction as a result of this.”
A mid-March survey showed 40 percent of Americans were nervous or worried about eating out while 27 percent avoided going to restaurants altogether. This is why we need America’s Recovery Fund. Even as restaurants are allowed to gradually reopen, many will be unable to meet operating expenses or achieve necessary revenues to sustain themselves for much longer. Open Table forecasts 1 in 4 restaurants will go out of business due to the pandemic. If this isn’t bad enough, total restaurant reservations are still down 95 percent and losses in sales totaled $50 billion last month. The Recovery Fund would provide the liquidity restaurants need to retain and rehire staff, pay rent, meet certain debt obligations, and pay state and local taxes.
We do not have time for an industry-by-industry approach – businesses, and the communities that rely on them, need help now.