For the past two years, Massachusetts restaurant owners have been in danger. The outbreak has led to locks and food restrictions, resulting in huge losses for restaurants. And despite government assistance, the Massachusetts Restaurant Association (MRA) says the industry still faces major challenges.
According to MRA data, nearly 16,000 restaurants have been closed since March 16, 2020, when domestic dining was initially banned. Although outdoor dining and limited indoor dining were restored in June 2020, more than 3,200 were not reopened.
According to Steve Clark, vice president of the Massachusetts Restaurant Association, there were many survivors in addition to the permanently closed restaurants.
“Restaurants in Massachusetts are facing a lot of challenges,” he said. “Even after the domestic ban was lifted, other restrictions were still being lifted.”
He noted that the restaurants were largely dependent on the local population and tourism, but that at the time of the outbreak, the former restaurants were limited in number and the latter was essentially extinct.
He used the Boston area as an example.
“Many restaurants in Boston and other nearby cities are based on schools and businesses,” he said. “When many people choose to work remotely, some restaurants may lose 50% to 60% of their income.
“Now some students are back, which is good news. They could have run the restaurant,” he added.
Inflation has hit the restaurant industry. US annual inflation rose to 6.8% in November, the highest since November 1990, according to the US Department of Labor. Meanwhile, both energy and food prices have risen sharply, further worrying restaurant owners.
“Unfortunately, not all of these challenges were met,” Clark said. “Delta virus, eviction orders, rising transportation costs… can affect all restaurants.”
Recognizing the challenges facing restaurants, the US government has launched a number of programs to support small businesses, the largest of which is the PekC Protection Program (PPP) and the Restaurant Revitalization Fund (RFF).
The former allowed restaurant owners who started businesses before February 15, 2020, to apply for a loan, and the latter, which targeted major restaurants, allowed owners to apply if they started a business during the outbreak and received a PPP loan. As a small business, the money was distributed to Massachusetts applicants under his control.
But despite the fact that PPPP and RRF lent more than 10,000 loans to restaurant owners, it was an ocean drop compared to the industry’s losses. The MRA estimates that only one-third of applicants have received PPP or RRF funding.
“The money has helped some restaurants, but the money ran out quickly, and we are not sure if there will be any more funding,” said Clark, who oversaw the funding. Those who did not have money were still struggling. ”
Ms. Gerber, a professor at the Hospitality Management School at Boston University, said it was important to improve the basics for restaurants to survive, including quality services and products.
Gerber, who has worked in the industry for 11 years, said, “It may be difficult but the best strategy for non-subsidized restaurants is to get better food and service. People still want to go out and eat, so restaurants should try to give as much as they can.
He also said that restaurant management should focus on the mental health of employees and refrain from pressuring them to provide better services.
Michael Kaufman, a professor of business administration at Harvard University School of Business, said restaurants, whether subsidized or not, should manage their finances during the renovation. He said restaurant owners should prioritize bargaining with landlords and looking for more economical deals.
“If the owners can reduce costs well, they have a great chance of getting through this,” Kaffman said.
Both said it would not be wise to expect more funding from the federal government.
“It can take months or years to pass federal funds,” says Gerber. “Every restaurant now has to focus on its own plan to revitalize. There is still much to be done. ”
Mutian Qiao writes for the Boston University State House program.