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Update: Restaurant Operators Don’t See Business Improving In Next Six Months

3 min read

The National Restaurant Association recently surveyed thousands of restaurant operators from across the country about what effect the COVID-19 pandemic has had on their businesses, and the results from Arkansas’ operators were anything but promising.

According to the report, 55% of the Arkansas operators surveyed from Aug. 26 to Sept. 1 said they don’t expect sales to return to pre-coronavirus levels within the next six months.

And 41% said it is unlikely they will still be in business six months from now if current business conditions continue and if there are no additional relief packages from the federal government.

Other highlights of the report include:

  • 85% said their total dollar sales volume was lower than it was in August 2019. Sales were down 34% on average.

  • 55% said their restaurant’s total operational costs (as a percent of sales) are higher than they were prior to the outbreak. Only 29% said their costs are lower.

  • Off-premises sales currently represent a higher proportion of their total business, according to 73% of the operators surveyed.

  • 30% said business conditions have worsened from July. Just 18% said business conditions improved in August.

Operators were also asked about their staffing levels, which, on average, are at 70% compared to what they would have been, pandemic aside. 

And 38% of those surveyed do not expect their staffing levels to return to pre-coronavirus levels within the next six months.

There was an initial rehiring surge in May and June. According to the report, 54% said they added employees in July and August, while 11% say they laid off or furloughed employees then.

Then 45% said they plan to add employees in the next 30 days; 11% expect to lay off or furlough more employees.

In addition, the association’s national survey of 3,500 operators found that nearly one in six restaurants (nearly 100,000 restaurants) is closed either permanently or long-term; nearly three million employees are still out of work; and the industry is on track to lose $240 billion in sales by the end of the year.

The association cited the survey results in a letter to Congress urging leaders from both sides of the aisle to pass small business programs in stand-alone bills that could help the industry recover. Read that letter here.

The association has also published on its website a “Restaurant Industry Blueprint for Revival” that details its recovery proposals.

Also this week, the American Hotel & Lodging Association recently surveyed more than 1,000 hotel owners and managers, from Sept. 14-16. This survey is in addition to the survey Arkansas Business reported on previously.

The survey found that 68% of hotels have less than half of their pre-coronavirus staff working full time. Of those surveyed, 74% said that, without further governmental assistance, they would be forced to lay off additional employees.

Additional highlighs included:

  • Half of the hotel owners said, due to the pandemic, they are in danger of foreclosure by their commercial real estate debt lenders.

  • More than two-thirds (67%) reported that they will only be able to last six more months at current projected revenue and occupancy levels if further relief isn’t forthcoming. 

The AHLA and the Arkansas Hospitality Association have partnered on “Save Hotel Jobs,” a grassroots initiative for hoteliers across the country to urge lawmakers to swiftly pass additional stimulus relief before departing on recess to campaign. Members of Congress have received more than 200,000 letters, calls and tweets as a result.

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