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Editor's Note: Rohini Dey is the founder and owner of Chicago's Vermilion restaurant. He previously worked at the World Bank and McKinsey & Co. and is a member of the James Beard Foundation. Follow her on Twitter @Rohinivermilion and on Instagram. The opinions expressed are yours. See more opinion articles on CNNe.com/opinion
(CNN) - Restaurants, especially independent ones, have been decimated by the pandemic. Without access to the same financing options as large corporate chains, restaurant owners like me have to decide whether they should stay open and how to stay open, or simply abandon the business entirely.
Selling t-shirts, hats and gift certificates is not going to save us. As more states gradually implement restaurant reopening, many of us have no idea what the right move is. But we do know this: we need drastic and realistic solutions for restaurants to survive in the future of the covid-19 era.
After running my restaurants for 17 years, including 10 years in New York City and Chicago, I've had plenty of time during these closed months to study the industry and news reports, speak to colleagues, and attend Zoom forums about the state of my industry, I have had a panoramic view of the crisis through the James Beard Foundation, where I am a trustee.
Although the people who run restaurants have faith in our creativity and resistance, the prognosis is terrible. Some 1,400 responded to a recent survey by the Beard Foundation and the Independent Restaurant Coalition. He predicted that months of closings, growing debt, and diminished capacity will kill perhaps 80% of America's independent restaurants.
Two-thirds of America's restaurants are small independent businesses. They employ 11 million of the 15 million workers in this sector. Millions of them are now unemployed and face permanent job loss.
In the midst of this catastrophic reality, some champions have emerged, including the Independent Restaurant Coalition, a group representing 50,000 restaurateurs who are pushing Congress to approve a $ 120 billion relief fund to save local restaurants. The Beard Foundation has funneled millions in grants, and the National Restaurant Association, a powerful lobbying group representing 380,000 businesses, has asked Congress to provide $ 240 billion in emergency aid directly to restaurants.
What is at stake? Much.
Restaurants are a mega-industry in the United States. They comprise over a million small businesses that employ more than 10% of the workforce and generate $ 1 trillion in GDP. Beyond the economy, restaurants are the beating pulse of our cities.
The fierce independence and flavor of restaurants in a city or town are as important to its culture as any historical or natural attraction. This spans the spectrum of street food, themes, cafes, bars, diners, neighborhood hangouts, global belts, one-of-a-kind restaurants, fancy venues, community canteens, or expensive fixed-price venues. We are the "third places" where communities flourish.
Many of us love to go out to dinner and now we miss it so much. It is like movies, art, books, travel, shopping or any form of entertainment and satisfaction. We work to live, and eating out is exciting, whether you're promiscuously trying a new place or an old, comforting one. Dining and drinking with friends around a table is something no online chat or takeaway can match. Our restaurants could be the last bastion of social interaction outside of our homes in our increasingly isolated and technological lives.
For their part, restaurant owners and chefs give a lot back to their communities. We fund events and fundraisers with donated food and the work of our chefs and staff. We promote sustainability and donate abundantly to food banks, nonprofits, schools, food events, and festivals. When guests buy expensive gala tickets, they often don't realize how much American restaurants have subsidized these events.
Many of us dive into our narrow margins to help causes that serve the general good, such as women's parity, education, immigrant rights, and many more. That so many restaurants operate solidarity kitchens during this pandemic is a testament to this spirit.
Bend or fight
Each of us owners is struggling with questions about the future: whether to reopen or resign. Federal aid has been marginal, illogical, and would be laughable if it weren't so tragic. The highly publicized paycheck protection program reached a fraction of independent restaurants, most of which were not accessible.
Recipients are supposed to use PPP to cover eight weeks of payroll while they are closed, which is irrational: there is no point in asking for a loan to employ people while it is legally closed. Meanwhile, we continue to accumulate losses and debts while we cannot open by law.
Restaurants face dire hurricane force winds on many fronts.
According to research firm Datassential, up to 68% of customers will avoid going back to restaurants, and 20% will be nervous when they do. Without a vaccine or a universal testing, monitoring and isolation program, that rational fear will persist.
And most Americans remain uneasy about the reopening moves, with 67% saying they would be uncomfortable going to a store and 78% saying they would be uncomfortable eating at a restaurant, according to a recent poll by The Washington. Post and the University of Maryland.
Our customers cannot eat with masks on, and we cannot deliver plates while standing 2 meters away. Nor can we separate our employees into narrow kitchens, which are designed for compact efficiency and speed.
The guidelines for redesigning a restaurant for reopening are inconsistent at best. Each of us will have to navigate through thousands of manuals, from the Occupational Safety and Health Administration, the Centers for Disease Control and Prevention, city and state health officials, and consultants to solve this. .
Fear the worst
The worst fear of every restaurateur is an outbreak associated with our business, whether among staff or guests, that harms the health of customers and workers, requires quarantine and damages our reputation, possibly beyond salvation.
Despite all the social distancing and custom cleansing, states are tentatively reopening, and security will be a nightmare to comply with a virus that remains inside guests' airflow pathways. Or for our employees who use public transportation. A shortage of basic personal protective equipment compounds this dilemma.
Additionally, much of our workforce is undocumented. Our employees live in the shadows, are outside of social safety nets, and are the most defenseless among us. An increase in covid-19 in this sector of the population is a major vulnerability, as Singapore's experience with the pandemic among its migrant workers has demonstrated.
Reorganizing our space to meet social distancing requirements will reduce our capacity and reduce revenue by at least two-thirds. Much of our space will be unusable, including bars, common spaces, large tables, and booths. Meanwhile, all of our fixed costs, from rentals to leases to contracts, will not be reduced at all. The cost of food and safety-related sanitation will only increase, in some cases dramatically.
And withdrawing employees from unemployment benefits can be difficult.
Consumer demand will spiral down as high unemployment, low incomes, and low demand continue to reinforce each other. Tourism demand and corporate events are dead: they are large portions of our income.
To increase traffic, restaurants will likely have to cut offerings and menus. And they will have to cut prices, making our results even worse.
It gets worse. We will face higher unemployment insurance costs and contributions once the federal bailout ends. We face potentially greater liability to the covid-19 from employees and customers than our insurance will not cover.
And we are likely to face repeated interruptions and stops as infections increase again. The very idea of facing another slowdown and openness is emotionally crippling.
What can we do?
To be honest? Only solving the public health crisis will save the culinary industry. Everything else is a suboptimal solution.
With a vaccine possibly two years away, we are baffled that beyond a federally-driven path to universal testing and isolation, the workaround is not being aggressively pursued. Experts at Harvard and New York University have ordered 24 million tests a day, with the ability to duplicate that in overvoltage situations.
With that solution completely off the table under the current administration, only genuine financial support can enable restaurants to overcome this crisis. The first $ 349 billion PPP sold out in two weeks, the second tranche of $ 310 billion just scratches the surface. To restore the small business spirit of legislation, all employers with fewer than 500 employees must be covered before extending this to others.
Second, the PPP must be turned into a grant to cover our fixed cost deficits during closing, and not a payroll loan.
It is also necessary to make our insurance industry live up to its business interruption coverage.
The sad reality for now is that restaurants, even those that may be partially reopened, will limp and eventually wear will be severe. No amount of changes for grocery stores, delivery, sidewalks or kitchens is a suitable solution.
Six weeks ago, I wrote an article asking our federal government to overcome machismo, inaction, laundering, and denial of the coronavirus. We are still in limbo and we hope he gets to work. Takeout is not what American restaurants serve. We deserve better.
Less hypocrisy and vanity, more justice
If you believe in creative destruction, perhaps something good can come from this disaster.
Restaurants are not an essential business. We are a luxury item. Despite the deification of celebrity chefs and groupie culture around food television and the food press, no twist can change this. Many in our industry go green with our herb gardens. We trumpet small farms on our menus and sponsor green markets, fetishizing the delicious vegetables we sell at astonishing prices.
In parallel, our menus and tastings flaunt ingredients like caviar, tuna, Wagyu and truffles, and exorbitant tastings that undo all notions of fairness. We talk about “farm to table” and “local” food, but 90% of what we use is shipped from somewhere else: this is how we all have a bounty of fruit, vegetables, seafood and meat in areas for a year , without comparative advantage in its production.
From farm to table is a good catchphrase for those who can afford it, but its ethical foundation is weak in a world that is reeling from basic food insecurity and hunger. If our industry could do without some of its own vanity and hypocritical nobility, we could be better off.
Restaurants operate at terribly low margins with staggeringly high failure rates and often operating terms for our employees. Much of this is for sheer survival and not for rapacious owners who roll in money.
Conversely, restaurateurs encourage employment through thick and thin, and we are caught in this vicious circle. But maybe there will be innovation after the destruction. Perhaps not all of our businesses are destined to survive this storm, to emerge with a stronger economy and less excess capacity in the industry overall.
Maybe it's time to reevaluate minimum wages, redraw tip credits, and rethink the lack of sick and parental leave and social safety nets. Perhaps this is true for all small businesses and even large companies today. These are problems that we must face as a society with our government. Now could be the perfect time to break with the past.
If we want restaurants, we have to help them
Our industry is furious that the precipice we have been driven to comes from the mandatory closing months and that we are facing an incredibly uphill journey, without the help that big business gets. It is not categorically an intrinsic and reckless failure of our own creation.
After the trillions spent on boosting the stock market and unlimited quantitative easing and corporate bond financing, shouldn't our government comply with an industry that employs about 15 million and is #TooSmallToFail?
The Large Groups of the Economic Reactivation Industry of the White House in the United States, the working group prepared with the health and wealth of our nation and "Opening America", obsesses that a national closure is not a sustainable solution long-term.
Its Food and Beverage Group is dominated by large corporations and chains, and the independent restaurants are represented by four famous white male chefs (immersed in French gastronomy) who do not remotely reflect the anguish, depth or diversity of our sector. . This augurs a continuing abysmal policy for a life support sector. We don't have the luxury of having our chance to reopen badly.
Restorers who choose to return will do so with crippling debt and the certainty that this debt will deepen through the crisis and the years to come.
Only deep pockets or a fearless sense of optimism can overcome the fatalism of these headwinds. Or maybe the sense will suddenly prevail and a genuine helping hand will emerge to #SaveRestaurants and keep them #OpenForGood.
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