We aren’t going to pull any punches here: the restaurant business is usually the first to take a hit when a crisis occurs. And with the coronavirus pandemic having spread across nearly every state, the effects are being drastically felt by restaurants, bars, and other hospitality businesses in America.
In an effort to keep our trusted Provi users and F+B allies informed, here’s all we know about how coronavirus is affecting our industry.
From Michelin-Starred restaurants to neighborhood dive bars, all kinds of establishments are being shaken and slowed by the pandemic. NYC hotspots like famed Le Bernadin, Daniel, and all of Danny Meyer’s Union Square Hospitality Group restaurants have closed until further notice. Major corporate players are even feeling the effects: Starbucks says it expects to lose up to $430 million in revenue due to the coronavirus. McDonald’s has canceled its worldwide convention scheduled for April in Orlando, Florida, instead planning to hold the meeting virtually.
Out west, the Seattle area was among the first to experience COVID-19, and the Seattle hospitality industry is already being impacted in major ways. Many restaurants have closed permanently, including 12 of 13 restaurants owned by famous restaurateur Tom Douglas.
In nearby areas like Portland, matters are looking less bleak. Many restaurants there are taking a ‘business as usual’, albeit with higher cleanliness standards and a more lenient employee sick policy. This is a common approach across the country, as many less-affected areas try to weather the ongoing storm.
On the opposite coast, the impact of the coronavirus is being felt intensely. On Thursday, New York made a major announcement: Effective as of Friday at 5 p.m., all New York state bars and restaurants will be required to operate under enforced half capacity. In New York City, top-tier restaurants like Daniel and Le Bernardin announced they would close indefinitely, as did all of the Union Square Hospital Group's restaurants.
Many businesses are operating on suspended hours, or within a condensed operating schedule, in an effort to cut costs and limit potential exposure to the virus. Travel bans and social distancing are impacting the restaurant and bar industries significantly, as would-be patrons decide to stay home in order to lessen their risk of exposure.
Although many restaurants are able to operate on these limited schedules and circumstances in the immediate future, longer-term operation may prove difficult.
Kiley Delgado, the owner of 649 Cocktail bar, recently told the tourism magazine Penta: “Right now we could support our staff and pay our fixed costs for 30 days if the doors shut tomorrow. If we wanted to dig ourselves into debt, we could sustain for a six-month closure while paying staff and fixed expenses.”
While small businesses begin to suffer, major events are also being canceled or postponed. SXSW, Coachella, St. Patrick’s Day parades, and numerous other popular events have been delayed or indefinitely canceled. Sporting events and leagues are postponed, and the list of affected events seems to continuously grow.
When these major events are canceled, local businesses that rely on them for traffic feel the effects. In major cities, sports bars and downtown restaurants often count on these large influxes of business to carry them through slower seasons.
For example, in Chicago’s Wrigleyville neighborhood, Chicago Cubs and baseball-themed bars should be gearing up for the start of their busiest season. Unfortunately, as Major League baseball is delayed, many of these bars may be left scratching their heads for the foreseeable future.
One question being asked by many is that of government support. In Singapore, where the bar industry is a major piece of the country’s economy, the government has stepped in to provide assistance to businesses that have been affected by the spread of COVID-19. For many, Singapore’s efforts are being seen as some of the most ambitious and successful so far, as they make thorough and effective measures to assist their now-struggling restaurant industry.
Here in America, the National Restaurant Association is expected to advocate on behalf of the food and beverage industry, should conditions continue to worsen. New York Governor Andrew Cuomo has begun to offer $75,000 interest-free loans, and many restaurants nationwide are hoping for similar support from their own state and local governments.
In a more positive light, many restaurants are beginning to offer paid sick leave for their hourly and salaried employees around the nation, in an effort to prioritize the well-being of employees over current profits. Grubhub has also said it will drop commissions on the meals it delivers from independent restaurants. Although the stock market has recently hit a record low, and despite the company’s own ongoing projections, Starbucks reports that it has (so far) seen no impact on sales.
Lastly, in a time where some levity is perhaps a much-needed change of tone, Shine Distillery in Portland is distributing free hand sanitizer, made from their high-proof liquor.
The National Restaurant Association has also issued a set of helpful recommendations to prevent the spread of the virus. Below, we’ve highlighted some ‘need to knows’ about Coronavirus prevention and safety for your bar or restaurant. But, for a full list of the NRA recommendations, click here.
Join over 10,000 alcohol industry professionals who use our content to make better business decision.