Mandated Covid-19 Mitigation Measures Wreak Economic Havoc on Hospitality Industry
Des Moines, Iowa (December 10, 2020) — Iowa’s eating and drinking establishments will lose in excess of $1.4 billion in food and beverage sales for calendar 2020, according to a study conducted by the Iowa and National Restaurant Associations. Overall, Iowa hospitality industry sales were down an average of 33%.
“These numbers are a stark reminder that our industry is on life-support,” said Jessica Dunker, President and CEO of the Iowa Restaurant Association, an advocacy group representing Iowa’s 6,000+ restaurants and bars, as well as other hospitality and entertainment venues that serve food and beverages. “We are an industry with razor-thin margins in good times. Without immediate state or federal relief, many won’t see Spring.”
The study found that most operators expect business conditions to worsen with a whopping 88% projecting an even further decrease in sales during the next 3 months. “Winter has come, and the outlook is bleak,” said Dunker, pointing to the severe impact on business of the weather in combination with current mandated service limitations.
Current restrictions include capacity reductions due to required social distancing measures, 10 p.m. alcohol service cut-off, requiring people to be seated while eating or drinking, table size limits of 8, group size limits of 15, and no bar seating. “No one built a business model that looked anything remotely like the conditions we’re operating under,” said Dunker. “We have no hope for profits in 2020, and we’re losing hope of survival.”
41% of Iowa Operators Don’t Know if They Can Stay Open
Since last March, the Association has projected that Iowa would likely lose 1,000 hospitality locations (appox. 20%) across the state by March 2021 due to COVID 19 mitigation mandates. Today, however, Iowa operators are even less optimistic with 41% of saying it is unlikely they will still be in business six months from now if there are no additional relief packages from the state or federal governments.
The Iowa Restaurant Association has joined thousands of small business advocacy organizations across the nation calling for the Federal Government to immediately pass a relief bill which includes additional Paycheck Protection Program grants. “Congress has to act before they adjourn for the holidays,” said Dunker. “It is unconscionable to think they might leave Washington DC, knowing they’ve left thousands of small businesses on the brink of failure.”
Call for State and Federal Relief
The Iowa Restaurant Association is also asking state agencies and lawmakers to create relief measures including directing additional CARES Act money toward small business grants, forgiving and/or deferring sales and payroll taxes and giving a minimum of one year respite on alcohol and other state license fees.
“When you consider that 1 in 9 working Iowans work in the food and beverage service industry, the impact of potential mass closures in our industry is frightening,” said Dunker. “The economic toll will be devastating to business owners, employees, and communities.”
Dunker is encouraging hospitality operators across the state to contact state and federal lawmakers throughout December and invite them to visit their businesses to see firsthand the toll COVID-19 has taken. “There’s nothing like the eerie quiet of a normally bustling bar, restaurant or entertainment venue to remind us of what we’ve lost, as well as what we stand to lose,” said Dunker. “Many of our establishments are the heart of their communities.”