The COVID-19 pandemic has affected every person and segment of society, but especially has devastated the restaurant and hotel industries.
According to recent figures from the National Restaurant Association, more than 100,000 U.S. restaurants have closed permanently, said Barry Biggar, president and CEO of Visit Fairfax (the Fairfax County Convention & Visitors Corp.).
More than 3 million restaurant employees still are out of work and the industry, which is the nation’s second-largest employer, is on track to lose $240 billion in sales by year’s end, he added.
Fast-food restaurants have had an easier time surviving the pandemic because 85 to 90 percent of their business involves takeout orders, said Gary Cohen, executive vice president of Glory Days Grill and legislative-affairs chairman for the Virginia Restaurant Lodging & Travel Association.
Full-service eateries, by contrast, do far less takeout business (although they have made significant strides during the pandemic) have been hampered by government-imposed seating limitations, he said.
Restaurants operating at full capacity typically have profit margins of between 5 and 8 percent and begin teetering if sales drop off by 5 percent, “so you can imagine what our [profit-and-loss statement] looks like when we are down 80 percent in sales,” Cohen said.
Restaurants are safe for diners, given the rigorous safety protocols they have implemented, but the public still is put off from dining out because the virus has not been controlled yet and the media and Centers for Disease Control and Prevention have tended to “scare people with false information,” he said.
The government should take two steps right now to help dining establishments survive, Cohen said. First, it should implement a second round of Paycheck Protection Program loans, without which many more restaurants will not survive the winter months, he predicted.
Secondly, the government needs to boost restaurants’ indoor capacity by allowing installation of Plexiglas dividers between tables, Cohen said.
“Opening up to 75- or even 100-percent occupancy simply does not help us when our tables need to be 6 feet apart,” he said. “Even at 100-percent occupancy, we can only use 50 percent of our tables, and I am not sure anyone realizes this.”
Restaurants have recovered some of their business through outdoor dining and takeout services and Visit Fairfax has been exploring ways to help them continue to do so even in the colder months ahead. For example, they could install heaters to continue serving diners at outdoor tables.
“Being from Canada originally, winter has never stopped me from going out and having fun,” Biggar said.
Fairfax County has helped restaurants during the public-health crisis by allowing ones lacking patios to erect tents on parking lots and sidewalks in order to facilitate outdoor dining.
Biggar said his organization hopes the county will continue that trend and that state officials will do likewise with emergency rules permitting takeout cocktails. Restaurants are “phenomenal community partners” that support organizations and sports teams and employ many people, including many entering the workforce for the first time, he said.
In addition to the restaurant industry’s woes, about 40 percent of hotel employees are furloughed, laid off or will not return to work, Biggar said.
Fairfax County’s hotel-occupancy rate in August 2019 was 74 percent; a year later, it had fallen to 38 percent, Biggar said. According to traditional estimates, hotels need about 50-percent occupancy to be able to cover their expenses and stay in business, he said.
“It’s difficult, devastating and really sad, because this industry in 2019 contributed $3.4 billion to our economy in Fairfax County,” Biggar said. “I’m hoping that we’re even going to break $2 billion in 2020.”
Only three Fairfax County hotels have closed during the pandemic, and just one of those will be shuttered permanently, he said. By comparison, about 55 or 60 District of Columbia hotels have shut down.
“With restaurants, we can do a lot to help people get to them,” Biggar said. “Hotels are an entirely different story, because the general public and consumers are not willing to travel. It’s tough to fill those rooms.”
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