Saving our restaurants and hospitality businesses

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As vaccines have begun their rollout in the United States, the majority of the country will likely not be  vaccinated until the summertime. Masking and social distancing are two of the tools being used to combat community spread of the disease, with experts agreeing the vast majority of spread is occurring within social bubbles of friends-family-colleagues who spend large amounts of time close together and unmasked. This has factored into the spikes we see occurring after major holidays.  

Our local restaurants and bars understand the responsibility they have for their customers, staff and community very well. Hospitality is already one of the heaviest health-regulated industries with a variety of coding and regulation requirements and oversight. Since COVID began, our local industry has spent millions of dollars to increase use of PPE, heighten between-guest cleanings, add new air filtration  systems, reduce capacity, invest in lay-out redesigns/renovations, display in-store signage, deploy digital  awareness campaigns, create special guest accommodations and more.  

Our restaurants and bars have pivoted and innovated. They’ve focused on delivery, to-go, drive-up, meal prep, outdoor dining expansions and more. And amazingly, they continue to give … feeding the hungry, gift certificates to charities, checks to local organizations, and volunteer time in the  community. The industry is a single-digit profit business in normal times, and with most restaurant’s revenue down 20 to 50% throughout majority of this year, it’s an unsustainable path for these businesses. The owners and staff work tirelessly and quietly behind the scenes to pull off the impossible and continue to survive.  

Approximately 10% of restaurants nationwide have closed permanently since the start of COVID.  Another 40% are on the brink without Government lifelines or an upturn in consumer spending.  Hundreds of Pinellas-area restaurants and bars have closed permanently or been forced to sell their  businesses at a loss since restrictions began 9 months ago. The Payroll Protection Program (PPP) loans  were not designed for the hospitality industry (who were shuttered to dine-in during its launch) and  largely went underutilized; and while local programs such as the Fighting Chance Fund and Pinellas  Cares Business Grants were welcome support for those that qualified, these have expired and also only  covered a small fraction of the revenue needed to survive.  

But probably the most vexing of the major headwinds facing the industry locally is the confusion over government regulations on their businesses. The state shut down their businesses to dine-in for nearly two months beginning in March, allowances were made in May to allow dine in at 25% capacity, then 50%, then on Sept. 25, 100% of indoor dine-in capacity was restored by the state (Executive Order 20-244). If a local county or city wanted to impose limitations on indoor dining, the state had three main requirements: (1) the lowest the reduction in capacity could be was 50%; and any reduction in capacity had to (2) “quantify the economic impact of each limitation or requirement on those restaurants; and (3) “explain why each limitation or requirement is necessary for public health.” The Pinellas County Ordinance (20-14) issued in June does not meet these requirements. 

However, Pinellas County is still attempting to enforce a 6-foot social distance ordinance between guests at adjacent tables, in direct conflict with the state’s Executive Order. The capacity of a restaurant or bar is set by local coding at a much smaller distance, where it’s not uncommon to have adjacent tabled guests sitting 2-3 feet apart (or in the case of booths, 1 foot apart). Employing the conflicted ordinance reduces most restaurants’ capacity to 50% or lower (with some reporting as low as 10-25% indoor capacity if they followed.) It’s important to realize that with the drop in dine-in traffic, the majority of restaurants and bars rarely reach 100% capacity and are typically over 50% capacity only 10-20% of the time they are open. Restaurants also realize their guests’ comfort is key, and most commit to stagger seating until they begin to fill above 50% capacity. Noting that with single-digit profitability, these small periods of increased capacity are vital to the revenue required to stay afloat.  

Nine months into Covid, guests that are concerned with being seated indoors near others have a variety of options: dining at off-peak periods, dining outdoors, choosing locations that follow self imposed wider distancing or enjoying delivery/to-go. Diners who are comfortable going out can make clear decisions as to the social distancing they are comfortable with, and these are typically very straightforward conversations with each business. Our local restaurants and bars appreciate the community’s amazing support that has helped them survive to this point, but want the public to be aware of the financial and governmental pressure they are under. The majority of owners and staff are not asking for handouts or to demand profitability, but they do need a minimum level of understanding by the local government to allow them to do business, self-manage their capacity, take care of their  guests and, hopefully, survive.  

It’s also important to note that the vast majority of restaurants and bars are following the local mask mandate to a much more stringent level than other businesses. It is not uncommon to be in a big box location, professional office, gas station or event and encounter dozens of folks not wearing any masks. Restaurants and bars are almost exclusively being targeted for masking oversight. The majority are exceeding their responsibility with signage, training, supplying masks, management checks and more for their staff and customers. The challenge comes in policing non-compliance with that rare guest who may be confrontational. The state removed the ability to fine individuals, and the local ordinance creates an unfair enforcement responsibility on the business owner. Thousands of dollars in fines, threats to business licenses and threats of criminal charges have already been levied against our local restaurant and bar owners – many times without due process or notice on details of the offense. Likewise, the enforcement posters, citations visits and even dialogue with enforcing officers is being inconsistently and unevenly applied. Some businesses and areas in Pinellas have received no notices, no posters and no visits, while others have been the focus of multiple visits, citations and overt focus.  

This article was drafted with the input from the Pinellas Independent Hospitality Forum (PiHF), which is an affiliated collection of over 100 local restaurants and bars. The Forum launched in October and is the third Covid-era project launched by Miguel Miranda (myrestaurantcfo.com) and Roger Curlin (clubsavor.com), local hospitality consultants and business leaders. The two have teamed up on numerous projects and saw the need to provide support for the industry beginning in March, filming a  20-video Covid-centric Hospitality series in partnership with USF’s Hospitality Leadership Program and then offering free consults to hospitality businesses throughout the summer.  

The Forum is designed as a weekly exchange of data, ideas, best practices and predictions from a select group of industry owners and leaders. The ideas are then shared within the collection of 100+ restaurants and bars, and are meant to address the most pressing challenges in the industry. The Forum and its members have reached out to city and county officials to create a dialogue of how to avoid further collapse of the industry while remaining great stewards of the public health, but as of the writing of this article there has been no response.

For more information on PiHF or this article, please email roger@clubsavor.com.