Open or Not? Does it makes sense to open restaurants now?
The Corona crisis is fading away but the problems for the restaurant industry are just starting. It will be a long process. We are all aware that we will not go back to normal as it was before.
Financial & Job losses
Many restaurant, bars, clubs will never open again and that comes with tremendous losses in jobs all over the world. The following graph shows the US situation but it looks more or less the same all over the world.
Many places decide to stay close. Dubai for example hopes for government help to help business survive.
“Restaurants in Dubai are losing more money by being open than by remaining closed, according to a letter signed by over 100 industry leaders including Marriott International, Tim Hortons, Sunset Hospitality and Solutions Leisure - and which account for over 50% of people working in the F&B sector and 10% of the city’s population. "We (the restaurant industry) must inform you that in fact, it would be more damaging to open for business now thereby losing more money with rent and employee liabilities than to choose to remain closed. “
Is help on the way?
This applies also to many places in Europe. Restaurants have a small profit margin. There are peak days like Thursday, Friday, Saturday where we need a full house to compensate for the weak days. With seating limitation to 30% or 50% this is impossible. Tax deduction will help a little but are not enough. Government loans are a bad solution as you only postpone the day when you have to pay the bills and maybe close the doors forever.
To run a restaurant is hard work, needs creativity, hospitality, fun but also needs a calculator to keep the finances under control. It will be a long way!
Author: Stephan Busch, Academic Director at the State University for the Humanities Moscow RGGU, Faculty of Tourism & Hospitality and the Swiss International University earned his Master Certificate in Hospitality Management from Cornell University, USA. He has a diverse experience in launching operations, business development and service training- for hotel and cruise companies in Asia, Europe, Canada and Russia.