Restaurants brace for long COVID-19 winter
Restaurant groups are scrambling to secure funds to help an already hard-hit industry make the transition from summer to winter, when outdoor seating that helped many owners stay afloat during the pandemic will become much harder if not impossible to continue offering.
Many cities have become accommodating by making more sidewalk and street space available for bars and restaurants during the warmer months, but that may not be enough to attract customers as temperatures drop.
One in six restaurants have closed since the coronavirus took hold, and many fear that the next six months will be too much for small-business owners in colder climates.
Seventy-seven percent of full-service restaurant operators said they would likely take advantage of incentives, like a tax credit, to help them purchase tents and patio heaters, among other equipment, to extend the outdoor dining season, according to the National Restaurant Association.
“Congress is about to leave town and not come back until mid-November. The stakes are really high. Every week or two, every restaurant that was considered too revered to fail is announcing they are closing their doors. That was while things were good; that was while outdoor dining was a vital option for them,” said Sean Kennedy, the association’s executive vice president of public affairs.
In addition to tax credits for restaurants that are winterizing their outdoor spaces, owners would also benefit from another round of the Paycheck Protection Program (PPP), he argued.
Mayors and local officials are working to help restaurants, but state and municipal governments are also in need of federal aid from another coronavirus relief package.
“Mayors are doing everything that they can to work with the industry,” Kennedy said. “But once it becomes winter, it’s not going to matter how thick the blanket is. People are not going to eat outside and we’re going to need a solution.”
The National Restaurant Association called on the U.S. Conference of Mayors on Monday to continue to encourage expanded outdoor dining areas by streamlining permit processes and to incentivize efforts to prolong outdoor dining with tax credits or funding for purchases of equipment.
Funding for cities and local governments has been a point of contention during negotiations over another federal COVID-19 aid bill, with Republicans reluctant to provide funding for cities.
Trey Malone, professor of agricultural, food and resource economics at Michigan State University, noted that any government help for restaurants to survive the winter should be tailored by location.
“The public policy needed for Detroit, Mich., needs to be different than Auburn, Ala. The day we decentralized the majority of the pandemic policy response leads me to believe that it makes more sense to empower state and local governments to make decisions that are best for on-the-ground decisionmaking,” he said.
“The idea that the federal government could develop some all-encompassing policy is hard for me to wrap my head around,” Malone added.
Washington, D.C., Mayor Muriel Bowser (D) announced last week that the city will spend $4 million on a grant program to assist restaurants with winterizing their outdoor dining areas. Grant recipients would receive $6,000 to purchase materials like tents, heaters and propane.
Chicago Mayor Lori Lightfoot (D) recently held a competition to engage community members to reimagine outdoor dining in the Windy City during winter months. And New York City Mayor Bill de Blasio (D) extended the outdoor dining program for restaurants to be able to keep sidewalk dining.
While the news was a huge win for restaurants in New York, it didn’t come with any funding relief, said Amanda Cohen, owner of Dirt Candy.
“That’s a sigh of relief, but nobody has come out and said, ‘We’re going to help you build that structure, we’re going to offset your electricity cost,’ ” Cohen told The Hill.
Cohen is a leader of the Independent Restaurant Coalition, a group that’s lobbying for passage of the bipartisan Restaurant Act. The bill, which was included in the House Democrats’ coronavirus relief package released Monday night, would provide $120 billion in grants to restaurants. The restaurants have to not be publicly traded to qualify and have $1.5 million or less in annual revenue under normal circumstances.
Cohen is a leader of the Independent Restaurant Coalition, a group that’s lobbying for a bipartisan bill in Congress called the Restaurant Act. The bill would provide $120 billion in grants to restaurants that are not publicly traded and have $1.5 million or less in annual revenue under normal circumstances.
“On top of having just our regular costs that we have, there is [personal protective equipment] and building these outdoor structures and something that will last through the winter. That’s a lot of money we have to spend and none of us have extra money,” Cohen said.
Sen. Roger Wicker (R-Miss.) and Rep. Earl Blumenauer (D-Ore.) introduced the legislation in June. The grants can be used to cover payroll, rent, protective equipment, food and other costs. The bill provides an addition or substitute to PPP loans for restaurants to spend more on overhead costs.
“With winter coming, independent restaurants that are holding on by a thread will face even greater challenges to survive. On behalf of these small businesses, workers, and the communities they call home, Congress must take immediate action to save our beloved local dining establishments,” Blumenauer said in a statement.
Wicker added in a statement, “These small businesses are hurting because of the costs of restocking perishable foods, retooling their operations, and they still cannot operate at full capacity even as the country reopens.”
The bill is written to not just provide a Band-Aid for restaurants, but also to help restaurants survive until a vaccine is available, Cohen noted.
The timeline for a widely available vaccine is well past this upcoming winter.
Even acquiring materials to winterize might also be a struggle. Malone predicted there will be shortages of items like heaters and tents in the U.S., similar to the shortages of deep freezers for food storage early in the pandemic.
He also expects some restaurants could temporarily close for the winter just to survive.
“I would predict that a lot of restaurants are going to go dormant and reopen in the spring. That’s the only logical response for some of these places. These restaurants operate on razor-thin margins to begin with,” Malone said.
The National Restaurant Association is hopeful restaurants will boost their takeout and delivery services, which was a huge focus for the industry in the spring.
“The bottom line is there are people right now who will only eat outside and if that’s not an option, we hope they will do takeout and delivery,” Kennedy said.
The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.