by Scott McClallen
The coming cold weather will hurt restaurants operating at reduced indoor capacity.
The Michigan Restaurant & Lodging Association (MRLA) estimates 4,000 restaurants, or 22% of those in the state, likely won’t survive past February.
Expanded outdoor patio seating and federal loans threw a life preserver to restaurants shut down or forced to operate through curbside service for months.
But federal loans have run dry and those willing to eat outdoors will dwindle as the temperature drops.
“The hospitality industry in Michigan finds itself in a precarious position this fall as dropping temperatures and mandatory capacity restrictions indoors threaten its very existence,” MRLA President and CEO Justin Winslow said in a statement.
MRLA suggested policy solutions to help Michigan’s restaurants and hotels survive the winter.
- Allow Michigan’s meetings and banquets centers statewide the same access to market as restaurants at 50 percent capacity indoors with appropriate social distancing and sanitization standards
- Allow restaurants to retain the expanded capacity via outdoor seating by allowing them to safely winterize those spaces while extending their temporary alcohol service permits
- Allow for expanded indoor capacity, both at restaurants and banquet centers if the data reported by the Michigan Department of Health and Human Services falls below a 3% positive test rate over an extended period
- Restore Pure Michigan funding to encourage the restoration of safe travel
- Promote and subsidize the requisite education and training necessary to earn credentials associated with the MRLA ServSafe Dining Commitment
“Michigan’s hospitality industry, through innovation and outright grit, has risen to the challenge of providing safe service for its guests and employees,” Winslow said. “The state’s own contact tracing data validates the relative safety of our operations.”
As of Monday, state data show 10 COVID-19 outbreaks from restaurants, defined as two or more cases linked by place and time indicating a shared exposure.
“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,” Winslow continued. “We must act quickly as nearly 5,000 small businesses and well over 100,000 jobs hang in the balance.”
Michigan’s hospitality industry, the state’s second-largest employer, is hurting, according to new MRLA data finding:
- Nearly 2/3 of hotels remain below 50% occupancy, which is the commonly understood profitability threshold.
- 62% of restaurant operators report increased operational costs since the onset of COVID-19, mostly due to new Personal Protection Equipment and sanitization standards
- Hotel unemployment remains at 38%, meaning that four in 10 hotel employees who worked in the industry in February are no longer employed in the industry
- Restaurants in Michigan are operating with 1/3 fewer employees than year-to-date
- 74% of Michigan operators say they don’t expect their restaurant’s sales to return to pre-coronavirus levels within the next six months
Before COVID-19, Good Truckin’ Diner in Reotown could serve about 25 people inside, usually leaving a winding line down South Washington Ave.
With state-mandated restrictions, that’s now about 16 people. Their outdoor patio adds four more tables.
Mandy Westfall, a server, said they plan to keep their patio open as long as they can while customers still are willing to sit outside, warmed by heaters.
“Without the patio, it’s going to affect [us] greatly,” Westfall said.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.