The past two years have been a disaster for Massachusetts restaurateurs. The pandemic has resulted in closures and indoor dining bans, causing significant loss to restaurants. And although government help has arrived, the industry still faces great challenges, according to the Massachusetts Restaurant Association (MRA).
MRA data shows that since March 16, 2020, when indoor dining was initially banned, nearly 16,000 restaurants have closed. Although outdoor dining and limited indoor dining were reinstated in June 2020, more than 3,200 of them never reopened.
Massachusetts Restaurant Association vice president Steve Clark said other than restaurants that have closed for good, many others are barely surviving.
âMassachusetts restaurants have faced too many challenges,â he said. âEven after the ban on indoor eating was lifted, other restrictions still stifled them. “
He pointed out that restaurants are largely dependent on locals and tourism, but during the pandemic, the former had limited access to restaurants and their number was reduced, and the latter practically disappeared.
He used the Boston area as an example.
âA lot of restaurants in Boston and other nearby cities depend on schools and businesses,â he said. âWhen many people choose to work remotely, some restaurants could lose 50 to 60% of their income. And a lot of seasonal restaurants that catered for tourists had to close, because of the long winter, and we didn’t have any tourists at all.
âNow some students have returned which is good news. They could go to restaurants, âhe added.
Inflation has also rocked the restaurant industry. The annual inflation rate in the United States climbed to 6.8% in November, the highest since November 1990, according to data from the United States Department of Labor. Meanwhile, energy and food costs have both risen significantly, further troubling restaurateurs.
âIt wasn’t all the challenges, unfortunately,â said Clark. “The delta virus, eviction orders, rising transportation costsâ¦ they could all have an impact on restaurants.”
Recognizing the difficulties faced by restaurants, the US government has launched numerous programs to support small businesses, the most important of which were the Paycheck Protection Program (PPP) and the Restaurant Revitalization Fund (RRF).
The former allowed restaurateurs who had started their business before February 15, 2020 to apply for loans, and the latter primarily targeted restaurants, allowing owners to apply even if they had created their business in the middle of the pandemic and received the loan. PPP. According to the Small Business Administration, the money was distributed to eligible Massachusetts applicants under his supervision.
However, although PPP and RRF totaled more than 10,000 loans to restaurateurs, it was a drop in the ocean compared to the industry’s losses. The MRA estimated that only a third of applicants received PPP or RRF funds.
âThe funding helped some restaurants, but it wasn’t enough,â said Clark, who has been keeping an eye on the financial aid, âbecause the money ran out quickly and we don’t know if it. There will be additional funds. Those who had no money were always in difficulty. “
Seth Gerber, an instructor at Boston University’s Hospitality Administration School, said improving fundamentals is key to helping restaurants survive, including quality products and services.
Gerber, who has been in the industry for 11 years, said, âIt can be difficult, but the best strategy for these subsidized restaurants was to get better food and better service. People always want to go out and eat, so restaurants should just do their best to give them what they want.
He stressed that restaurant management should pay attention to the mental well-being of the staff and avoid putting too much pressure on them to provide better services.
Michael Kaufman, senior lecturer in business administration at Harvard University Business School, stressed that restaurants, with or without grants, should properly manage their costs during the revitalization phase. He said restaurateurs should prioritize negotiating with owners for better terms and finding suppliers with more economical offers.
âIf homeowners can cut costs well, they have a better chance of doing it,â Kaufman said.
Both said that it would be unwise to wait for additional funding from the federal government.
âIt could take months or years for the federal funds to flow,â Gerber said. âEach restaurant should focus on their own plans to revitalize themselves now. There is still a long way to go.
Mutian Qiao writes from the Statehouse program at Boston University.