HOLLAND — The cold months could lead to record closures in the restaurant and lodging industry.
That’s according to a report from the Michigan Restaurant and Lodging Association released Monday, Sept. 14, as part of its “Don’t Leave Michigan’s Hospitality Industry Out In The Cold” campaign.
The report warns that nearly 4,000 restaurants and 800 hotels in the state could permanently close over the next six months if more aid isn’t provided or capacity restrictions aren’t lifted.
“While expanded outdoor patio seating, great weather and federal stimulus funding helped to sustain the industry throughout the summer,” the report read, “more than half of the hotels in Michigan remain unprofitable and nearly a quarter of the state’s restaurants do not anticipate being in business in six months.”
Proposals from the campaign include allowing meeting halls and banquets centers the same access to 50 percent capacity indoors as restaurants, while letting restaurants retain their expanded capacity by winterizing outdoor spaces.
The campaign also calls for expanded indoor capacity across the board as data allows.
“Michigan’s hospitality industry, through innovation and outright grit, has risen to the challenge of providing safe service for its guests and employees,” said MRLA CEO Justin Winslow.
“The state’s own contact tracing data validates the relative safety of our operations. We have provided realistic solutions and stand ready to work collaboratively with the governor, the legislature and local leaders across the state to help safely transition this industry indoors as the season changes.”
A study conducted to aid the report found that 62 percent of restaurant operators have experienced increased operational costs since the onset of COVID-19, while hotel unemployment remains at 38 percent and restaurants are operating with 33 percent fewer employees than they usually would at this time of year.
No access to funds
Lucas Grill, owner of four restaurants in the area — Public in Zeeland and Poquito, Obstacle No. 1 and Seventy-Six in Holland — has seen the devastation firsthand.
“The Payment Protection Program was heralded as this big lending program that was going to help out,” he said. “But over 20 percent of all jobs lost during COVID were restaurant-related jobs and only 6 percent of PPP funding went to restaurants.
“That’s the first problem. We didn’t have that boost to get us along. We’re on life support. It was a great program, but it was put together so quickly that certain industries couldn’t access the funds in a way that would get them what they needed.”
Limited capacity still in effect
A compounding problem, Grill said, is ongoing 50 percent capacity restrictions mandated by the state.
“We’re in a tourist town,” he said. “And during the entire tourist season, we were told we could only have 50 percent of our business function. All of that money that we could normally put away for the winter, we didn’t have.
“All four of my restaurants were on a wait this weekend. The amount of people we had to turn away, it’s such a disheartening thing for your staff. People are coming here and wanting to spend money on the local economy and we have to tell them, ‘We can’t accept your money.’ And it’s only so long you can do that before you’re out of business.”
According to Grill, not a single employee at his four restaurants has tested positive for COVID-19.
“If there are no outbreaks, why are we still being restricted?” he said.
Winter is coming
Another problem, Grill said, is perhaps the most concerning: the impending winter months.
“Restaurants expanded patio seating, but that’s a short-term solution,” he said.
“This week the weather is fantastic. But what happens during the next two weeks? Halloween is 30 days away, and it’s always a coin-flip in October what the weather is going to be like. No one is sitting on a patio at 7 p.m. when it’s 50 degrees outside. It’s not going to happen.”
“At some point, you have to balance the health side with the economic side. Restaurants are the heartbeat of a community. But the MRLA is 100 percent right. There are going to be restaurants closing left and right like you’ve never seen before.
“It’s so crushingly, tragically awful. All of these owners are saying, ‘You have to help us. Our industry is dying.’ But we’re on our own.”
Grill added that restaurants are an important source of entry-level jobs.
“We have work for people who need a starting point,” he said. “If you think about it, we’re the backbone of the American labor force. And if those jobs go away, they’re gone. They aren’t coming back. It’s a really serious situation.”
Despite being owner and operator of four restaurants, Grill admits his businesses are among those struggling to make ends meet.
“Every single one of us has an expiration date,” he said. “I consider myself a fairly successful restaurateur, but there’s only a finite time before I won’t have any cash left.
“We’ve done takeout options and patio seating and catering. And it’s so disheartening to do everything you can and still lose money every single week. You have to ask yourself how much longer you can go. The government has to give us the ability to make enough money to survive.”
— Contact reporter Cassandra Lybrink at [email protected] Follow her on Instagram @BizHolland.