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DENVER (KDVR) — Restaurants have been some of the hardest-hit businesses during the pandemic, and despite COVID levels dropping and mask mandates expiring, a new survey finds a majority may have to close doors if conditions don’t improve.

The Colorado Restaurant Association surveys some of its members every couple of months to get a pulse on the issues they are still facing two years into a global pandemic.

Inflation is threatening to shutter Colorado’s independent restaurants. Under the current conditions, 54% of the 174 restaurants polled said they’ll have to close within a year due to rising costs of operations, according to the survey.

“Unfortunately it’s not that shocking,” said President & CEO of the Colorado Restaurant Association Sonia Riggs. “On average restaurants have $180,000 in pandemic-related debt. The last two years have been devastating for the industry and it’s going to take some time to get out of that.”

Virtually all restaurants said costs of operations are higher now than a year ago. Labor has risen most, followed by food, supplies and alcohol. Nine out of 10 Colorado restaurants are increasing prices to keep up with wage inflation, food price inflation and widespread labor shortages.

“I think a number of industries are trying to figure out ‘Where did everybody go?'” Riggs said in an interview on FOX31 NOW. She pointed to workers leaving the industry, preferring to work from home which they can’t do in the restaurant business, or retiring altogether.

The CRA survey indicates more restaurants are offering benefits and increased wages to attract and retain employees. Aside from the rising costs of doing business, the labor shortage is the number one issue restaurants are facing, according to Riggs.

On average, restaurants said they’ve increased wages by 20% since the pandemic started. Three out of four restaurants have had to raise wages between 11% and 40%. Nevertheless, the industry is still, 8,400 workers short of its pre-pandemic levels.

According to the survey, 50% of restaurants are now offering paid vacation time that previously didn’t, along with 36% offering medical insurance and 19% adding dental insurance to their benefits packages.

Riggs also said the booming popularity of delivery apps like Grubhub and Door Dash have increased the share of orders and chewed into these businesses’ bottom lines. On top of that demand, the number one item restaurants are struggling to keep in stock is disposables like to-go containers. About 75% of restaurants surveyed said disposables are hard to get due to supply chain crunch.

All these factors are compounded by the debt that restaurants have taken on in the past two years, and government funding dried up fast for Colorado restaurants looking for help.

According to Riggs, 64% of eligible restaurants in the state that applied for the Restaurant Revitalization Fund through the Small Business Administration did not get funding because the program ran out of money too soon. That accounts for 3,099 restaurants.

Denver Restaurant Week kicks off next month on March 11. Riggs hopes this and receding COVID levels will inspire better consumer confidence so more patrons eat out and help these struggling businesses.

“We’re just not seeing the number of guests go out to eat that we saw before the pandemic,” Riggs said.