Colorado restaurants will take time to recover

Money

DENVER (KDVR) — Few businesses were hit as hard by the pandemic’s economic blowback as restaurants, and times will remain tough until social distancing is a thing of the past.

Throughout the COVID-19 pandemic year, sit down restaurants lost huge chunks of revenue, economic impact, wages and workers as state restrictions kept them from opening to anything but takeout.

“Colorado restaurants collectively lost over $3 billion in 2020,” wrote Colorado Restaurant Association president and CEO, Sonia Riggs. “This is typically a $14.5 billion industry.”

On average, Colorado restaurants reported in March 40% in revenue losses throughout the pandemic. A tenth reported over 70% losses. One in every three restaurant workers – nearly 78,000 – lost jobs, many to end up on federal and state unemployment and COVID assistance.

COVID stimulus measures will provide some relief, but not as much as business normalcy will.

“Federally, the Restaurant Revitalization Fund is right around the corner,” said Riggs. “All that said, this isn’t enough. Colorado restaurants collectively lost $3 billion in 2020 – a $28.6 billion fund is not going to cover the scope of losses nationally. We’ll need to see more help as we enter recovery if we truly want this industry to bounce back to pre-pandemic levels.”

Restaurants felt singled out

Throughout the pandemic’s worst times, business and social distancing restrictions landed on restaurants and bars more heavily than most, but restaurateurs felt unfairly singled out.

Dr. Anthony Fauci incurred the wrath of Colorado’s restaurants last November when he told the state to open schools and shut down bars and restaurants.

Outbreaks associated with restaurants are one of the larger categories the state tracks. There have been 206 outbreaks identified at sit-down restaurants to date. Schools, retailers, child care centers, and offices and indoor workspaces, however, account for more.

They also account for more individual cases. Colleges, k-12 schools, retailers, offices, warehouses and various healthcare facility types each produced more cases from outbreaks than sit-down restaurants.

Gov. Jared Polis justified the restaurant restrictions by saying schools produce fewer cases per outbreak, despite their seeing more outbreaks altogether.

In reality, restaurants also produce one of the lowest average cases per outbreak ratios.

Sit down restaurants saw an average 4.62 outbreaks per average – the sixth-smallest of all 70 categories, and smaller still than the k-12 schools average of 6.8 cases per outbreak.

The post vaccine food world

As with craft breweries, restaurants will not bounce back over night. Economists predict full-service restaurants won’t fully from the pandemic for another three to five years.

Some of that will depend on customer habits and some on the distancing restrictions on businesses. People have gotten used to staying six feet apart and may not want to return to more crowded conditions too suddenly. Restrictions may make their choice a moot point, in any case.

Capacity, however, is the only road back to normal. Riggs said the industry has no chance of recovery until restaurants are full again.

“Restaurant recovery will not even begin until restaurants return to 100% capacity,” she said. “Further, restaurants will not have a path to 100% capacity until 6-foot distancing restrictions are lifted. With 6-foot distancing, most restaurants say they can only seat 25-50% of their restaurant.”

Until then, some of the COVID world will remain. Quintessential pandemic features such as delivery and outdoors options caught on with both the larger public and restaurants.

Over half of restaurants surveyed said they’d keep patio extensions for outdoor dining if the state let them. The money from extra dining space could be a silver lining.

Over a third of last summer’s restaurant revenue came from patio expansions, according to the association’s March survey. Those patios add an extra 20% of capacity on average – enough to cut into losses, if not to get back to full capacity.

Alcohol delivery and to-go allowances became another pressure valve during the pandemic, and 85% of Coloradans want them to stick around afterward.

Still, Riggs said, if restrictions continue they way they are, the industry will keep buckling.

“Optimism is certainly on the rise, but restaurants aren’t out of the weeds yet,” she said. “Forty percent of restaurants report they are still in danger of closing within six months. Targeted relief and capacity expansion will be imperative to local restaurants’ survival.”

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